Experts “Cointolab” told why the first cryptocurrency may continue to rise in price in the coming days
On July 31, bitcoin is trading at $23.8 thousand, over the past week the first cryptocurrency has risen in price by 6%. In a commentary by Cointolab, experts analyzed the situation on the market and told what dynamics to expect in the short term.“Risk appetite has increased
“Risk appetite has increased”
The week from July 25 to July 31 began with a decline in the BTC/USDt pair. Crypto assets with US shares fell in price ahead of the US Federal Reserve meeting (July 27). Investors closed long positions in anticipation of an aggressive rate hike by the Fed.
On July 26, the bitcoin rate fell to $20.7 thousand. The weekly low was formed against the backdrop of a fall in US stock indices, as well as a strengthening of the US dollar. The S&P500 fell 0.85%, the Nasdaq fell 1.87%.
The stock market came under pressure after Walmart Inc. cut its profit forecast, and the IMF warned of the possibility of a sharp slowdown in global growth. The dollar, in turn, rose in price due to the collapse of the single currency against the backdrop of the energy crisis (rally in gas prices).
On July 27, a new phase of Bitcoin strengthening began. The growth of quotations resumed following the stock indices after the meeting of the US Federal Reserve. The BTC/USDt pair recovered 7.99% to $22.9K.
As a result of the two-day meeting, the Fed raised the rate by 0.75% to 2.50%. During a press conference, the head of the Fed said that in the future it is possible to increase the key rate by more than 0.75 percentage points, but the decision will depend on incoming data.
Stock indices and cryptocurrencies reacted to US statistics with a fall, then growth resumed with renewed vigor. Investors thought that the Fed would not aggressively raise rates in November as the economy slows down. The Bitcoin exchange rate rose to $24.4 thousand.
On July 29, stocks continued to rally after the US Central Bank raised the rate to 2.5%. Investors liked the earnings reports of large technology companies for the 2nd quarter. The S&P500 and Nasdaq rose 1.41% and 1.88%, respectively.
The BTC/USDt pair rose to $24.1 thousand. Growth stalled, although the road to the $28-30 thousand zone is open to buyers. The upward movement may continue on Sunday. Buyers will close the monthly candle. In July, Bitcoin rose by 22.87% and Ethereum by 61.39%.
The upward movement takes place in the form of small impulses lasting 5-6 hours and corrections 10-13 hours. When a correction lasts more than 40 hours, buyers become nervous and close long positions in anticipation of a correction.
From important macro events: on Monday and Wednesday there will be data on business activity in the manufacturing and services sectors for July. On Friday, the attention of investors will be directed to the report on the labor market. The better the data comes out, the greater the growth of stock indices and cryptocurrencies will be.
In the new week from August 1 to August 7, investors will monitor the dynamics of the ether. If buyers pass the key resistance of $1.8 thousand, then a new wave of purchases of altcoins will begin on the crypto market.
“Bitcoin growth is a likely scenario”
Cointolab experts believe that bitcoin may well rise to $26,000 if the bulls are strong enough to overcome the pressure of the bears. Yesterday’s speech by Jerome Powell gave hope to market participants that such sharp increases in the key rate at the next meeting should not be expected, which means that capital will stop flowing from high-risk assets to low-risk ones, such as bonds.
At the same time, inflation remains at a high level, and the yield on treasury securities, taking into account the current increase, does not pay for this inflation. Under such conditions, investors can try their luck in high-risk instruments, which include cryptocurrencies. Therefore, they can invest part of their capital in bitcoin in the hope that the growth of the bitcoin exchange rate will exceed the growth of inflation, which means that it will help not only save capital, but also increase it.
The growth of bitcoin next week seems to us a very likely scenario. At the same time, I do not rule out a negative scenario, in which all the heights that bitcoin has reached over the past day will be lost due to investors’ fear of rising consumer prices.