Bitcoin Predicted to Surpass $74K by Year’s End

Bitcoin’s price dropped by over 25% during the August 5 global market rout. However, emerging signals suggest this decline could be a bear trap, and the price may return to its course toward a new record high in 2024. The potential for a bullish resurgence is strong given several technical and macroeconomic indicators aligning bullish trends for Bitcoin.

Bitcoin Downward Momentum Weakening

The Bitcoin (BTC) price shows signs of bullish divergence on the weekly charts. Despite forming lower lows since July, its weekly Relative Strength Index (RSI) has posted higher lows. This divergence hints at a weakening downward momentum and the possibility of an imminent upward reversal.

To avoid false signals, confirming bullish divergences with other technical indicators is essential. Notably, Bitcoin formed what appears to be a long-legged Doji candlestick last week. Such patterns, appearing after a strong trend, often signal potential reversals or at least a pause before the trend continues.

Bull Flag Pattern and Doji Candlestick

The Doji candlestick formation, accompanied by a rise in trading volumes near the lower trendline of Bitcoin’s bull flag pattern, indicates strong trader conviction in a potential price rebound. This bullish sentiment could propel Bitcoin to rally toward the flag’s upper trendline, around $66,500, by September.

Bull flag patterns are typically bullish continuation patterns. A strong close above the flag’s upper trendline could trigger a significant rally. In consequence, the price might rise by an amount equal to the size of the previous uptrend before the flag formed. Consequently, this confluence of bull flag, Doji candlestick, and bullish divergence signals might help BTC price break above $79,000 – a new record high – in the coming months.

Bitcoin Whales Accumulating Again

Bitcoin’s bullish reversal signals are further supported by on-chain data tracking the richest investors, also known as “whales.” Wallets holding at least 1,000 BTC have withdrawn the most Bitcoin from exchanges since 2015, marking the largest spike in nearly a decade, as per Glassnode. Over the past 30 days, around 73,350 BTC have left whale exchange balances.

The market interprets these surges in Bitcoin withdrawals from exchanges as a bullish indicator. Entities appear to prefer holding their BTC longer rather than selling them for other crypto or fiat. The last time Bitcoin whales withdrew this many coins from exchanges was in 2015, when BTC was trading at around $220. This period preceded a massive bull run that eventually took the BTC price to $20,000 by December 2017.

Macroeconomic Indicators Favor Bullish Reversal

Macroeconomic indicators are furthering Bitcoin’s bullish reversal outlook. As of Aug. 12, CME data showed 100% confidence in the United States Federal Reserve cutting its benchmark interest rates in September. The probability of a 25 basis point (bps) rate cut is 51.5%, up from 15% a week ago, with the rest anticipating a 50 bps rate cut, considered a bullish sign for Bitcoin.

All Eyes on CPI Data

This week is crucial for understanding the Fed’s interest rate outlook, with July’s US producer and consumer price reports set to be released on Aug. 14. Any indication of rising inflation could deter Fed Chair Jerome Powell from cutting rates in September, posing downside risks for Bitcoin and the broader crypto market.

The crypto market has opened its weekly session with an impasse between bulls and bears, indicating uncertainty toward the Aug. 14 inflation data. The deadlock is exacerbated by Fed Governor Michelle Bowman’s hawkish remarks, noting that she won’t support a rate cut in the September meeting. “The progress in lowering inflation during May and June is a welcome development, but inflation is still uncomfortably above the committee’s 2% goal,” she said on Aug. 10 in her address to the Kansas Bankers Association in Colorado Springs, adding: “I will remain cautious in my approach to considering adjustments to the current stance of policy.”

Conclusion

In summary, Bitcoin’s price action, technical indicators, whale accumulation, and macroeconomic backdrop all paint a bullish outlook. With key supports indicating weakening downward momentum, substantial whale accumulation, and macroeconomic conditions favoring a rate cut, Bitcoin could be poised for a significant rally. The coming days’ inflation data and Fed decisions will be crucial in confirming or negating this outlook.

As always, it’s imperative for investors to remain cautious and conduct thorough research when making any financial decisions. While indicators are overwhelmingly positive, the volatile nature of cryptocurrencies means risk is always a factor. Hence, staying informed and prepared is the key to navigating Bitcoin investments successfully.

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Note: This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. For further reading, consider exploring bull flag patterns and Bitcoin whales.