BTC - Look for a bounce this week

jrcornel (84) in bitcoin • 5 years ago

Bitcoin may look to bounce this week.

In the medium term, bitcoin may continue to consolidate and even drift slightly lower than current prices, which are about $9,500 right now.

However, there is a possible catalyst this week that may cause a bounce in the very near term.

What catalyst am I talking about?

The FED is expected to announce a rate cut this week.

It is not for sure that they will, but many are speculating that there is a very good chance that they will.

Environment matters!

Recently, part of the bullish momentum in bitcoin has been attributed to an "easy-money" environment.

IE, one where interest rates are being lowered instead of raised and quantitative easing is said to be on the back burner as a safety net should the economy sputter.

That is exactly the kind of environment that one would expect bitcoin to catch a bid in, just like it has.

A weaker dollar = upside in bitcoin.

The environment in 2018 was exactly the opposite with multiple rate hikes, a stronger dollar, and QE was a distant memory.

All that has changed now, and that is great news for bitcoin!

With roughly half of the bitcoin trading now happening in the US, what happens here in the US matters a great deal to prices.

What does that mean for prices?

I would not be surprised to see a rate cut later this week and bitcoin bounce back up near $11k at some point this coming week, possibly even $12k.

What it does from there is anyone's guess (actually I think we trend lower afterwards), but in the short term, we are set up for a bounce.

Stay informed my friends.

Image Source:

https://www.newsbtc.com/2019/07/27/fed-interest-rate-cut-is-rocket-fuel-for-bitcoin/

-Doc

bitcoin crypto busy palnet steemleo

5 years ago by jrcornel (84)

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scaredycatguide (73) · 5 years ago

Interesting. I often don't think about fed policy and bitcoin but I suppose there is some correlation. Will keep an eye on this. I do agree that prices will likely trend lower after a pop if there is one. Hoping to buy more at 8,500 then 7,500 if if gets that low. Otherwise hodl what I have.

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jrcornel (84) · 5 years ago

Yea, there does seem to be some correlation with easy money policies and bitcoin prices, at least since 2016 to now anyways.

Bitcoin is just about the furthest right on the risky-asset spectrum. Meaning that when money is 'easy' it does well.

In times of rising interest rates people tend to shy away from risky assets.

Therefore, easy money policies which are good for stock and other risky assets are good for bitcoin as well.

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10 votes

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newageinv (70) · 5 years ago

Actually, I see it somewhat differently but with the same result. I think the latest reading of the Q2 GDP and employment figures will make the Fed hold off reducing rates which will cause the financial market to get caught off guard and bring some pain to them except for bitcoin which will go the other way as it has performed well when this happens.

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jrcornel (84) · 5 years ago

Haha, well we shall see. I guess that is why they make a market, right?

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