Markets
Analysts Express Optimism as Bitcoin (BTC) Prices Approach Resistance Level
Analysts are increasingly optimistic about bitcoin (BTC) price outlook after a bounce off a crucial resistance level that capped gains earlier this week.
Since testing support at the 50-day simple moving average near $63,500, the leading cryptocurrency has bounced sharply to above $67,000, CoinDesk data shows, and is closing at a resistance line identified by the trend line connecting the March and April highs. The so-called descending trend line established a tough nut to crack on Monday, just like the last time it was in focus in May, making it a level for the bulls to beat.
That could happen soon, if analyst sentiment is any guide.
One trigger could be the U.S. Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred measure of inflation, due for release at 12:30 UTC (8:30 a.m. ET). Another is the Republican presidential candidate. Donald Trump’s Upcoming Speech at the Bitcoin conference in Nashville.
“The upcoming PCE data could be the final nail in the coffin for high interest rates and lead to imminent rate cut announcements, while Trump’s speech at the Bitcoin conference could kick off a stronger rally if rumors of a national strategic reserve announcement for BTC come true,” said Valentin Fournier, a digital asset analyst at a consultancy. Brand namehe said in an email.
These factors could push bitcoin to new highs, Fournier added.
According to FactSet, the PCE reading is expected to show a 0.1% increase in June, after virtually no change in May and gains of 0.3% in the previous three months. The annualized figure is expected to be 2.4% for June, the smallest increase since 2021.
Continued progress toward the Fed’s 2% target strengthens the case for interest rate cuts by the central bank. Renewed liquidity easing against the backdrop of resilient economic growth highlighted by US GDP data on Thursday could spur bidding for risky assets, including cryptocurrencies.
Cryptocurrency investors are also anticipating Trump’s scheduled speech Saturday. There has been a lot of talk all week about a possible announcement of a bigger role for BTC in the financial system.
Other factors such as the mining hashratewhich measures the amount of computing power dedicated to the network, and Stablecoin supply increase are also sending out bullish signals, according to crypto services provider Matrixport.
“Bitcoin mining hashrate, a leading indicator for Bitcoin rallies, has improved. Instead of cutting supplies, Bitcoin supplies continue to rise. The buildup suggests confidence in future price increases despite some miners shutting down unprofitable machines,” Matrixport said in a note to clients on Friday.
Matrixport also noted that fiat-to-crypto inflows have increased, as indicated by the recent increase in the market capitalization of the stablecoin sector.
“Historically, such increases have been bullish, signaling a shift of funds from traditional financial markets to the cryptocurrency sector,” he said.