Bitcoin Takes Advantage of China’s Weaker Policy and Upcoming Halving!
Bitcoin’s price is experiencing a slight increase on Monday, with no significant signs of bearish momentum. The cryptocurrency has seen a four-week consecutive rise in value and will be closely watched in the next 24 hours as China announces its monetary policy. Analysts anticipate no change in the 1-Year Loan Rate but predict a 10 basis point drop in the 5-Year rate. Bitcoin’s bullish trend is mainly attributed to China’s policy weakening, and continued dovishness could provide further support for its price.
According to the latest reports from economists and researchers, the asset has seen an increase in activity from institutional investors. According to experts at the analytical company CoinShares, over the past week, the net fund inflow into the new exchange-traded instruments amounted to $1.1 Billion, which is considerably high. On Wednesday, spot Bitcoin ETF inflow reached $651 million, the second highest since the start of the project.
Today, American trading floors are closed due to Presidents’ Day, so investor activity was generally low. However, some members of the Fed did speak at various events. Investors are trying to find hints of further actions in the monetary policy. Thus, on Friday, the head of the Federal Reserve Bank (FRB) of San Francisco, Mary Daly, confirmed that the national economy had made significant progress in reducing inflation, however, there was still a lot of work to stabilize it at the target level of 2.0%. Investors have their eyes fixed on Wednesdays FOMC Meeting Minutes and if will indicate the timing of the cut.
If the economy is able to remain resilient and the Federal in the meantime cut interest rates, demand for cryptocurrencies can rise. As the cryptocurrency is trading at recent highs, the asset has no major recent resistance levels. However, investors are contemplating whether the asset can rise to previous highs from 2021. Resistance levels from 2021, can be seen at $65,904 and $68,967. This would mean a further rise of at least 24%, but in order to achieve this, the market’s risk appetite will need to remain high.
The upcoming halving also provides support for prices as mining companies begin to hold onto mined tokens, creating a supply shortage in the market. Furthermore, when looking at technical analysis, the price also continues to maintain medium-longer term buy signals. The asset trades above the 75-bar EMA, above the VWAP and above the neutral on the RSI. However, if the asset is going to decline, indicators point to a retracement declining to $50,260.
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