Markets
Trump Courts Crypto Fans As Bitcoin Battles to Break $70K Barrier
- Bitcoin price approached the psychological level of $70,000 but was rejected.
- Open interest in Bitcoin futures has hit a new all-time high, suggesting that investor demand for the world’s largest cryptocurrency is on the rise.
- Among the factors influencing the price of Bitcoin are Donald Trump’s pro-crypto stance, rising geopolitical risks, and potential interest rate cuts by the Federal Reserve.
Most read: Markets Weekly Outlook: US Central Banks and Earnings. Will the BoJ Hike Rates?
Bitcoin prices hit the psychological $70,000 mark following Donald Trump’s courtship session.
Former President Trump addressed cryptocurrency enthusiasts at the Bitcoin convention in Nashville over the weekend, where he promised to end the “persecution” of the industry if elected president.
Bitcoin was already enjoying a positive week, but the comments were the push needed to push BTC/USD towards the psychological barrier of $70,000. This was coupled with rising geopolitical risk, something that has increasingly favored Bitcoin in 2024.
Bulls are becoming more vocal in their claims that a Bitcoin breakout is imminent, and there are a number of factors that have been cited to support this claim. Bitcoin futures open interest has hit a new all-time high, suggesting that investor demand for the world’s largest cryptocurrency is increasing. (Open interest is often used to measure the level of interest and liquidity surrounding an asset.)
Bitcoin open interest can provide valuable insights into market participants’ sentiment towards the cryptocurrency. For example, rising open interest could suggest growing bullish sentiment among traders, while falling open interest could indicate growing bearish sentiment.
Source: Glassnode
Couple this with the recent institutional report from Glassnode and Coinbase tracking Bitcoin cycles and you have another compelling data point. According to the research, the current bull market cycle, which began in November 2022, has seen prices rise 4x from their lows. The previous two bull markets (2015-2017 and 2018-2021) saw prices rise 100x and 20x, respectively.
Source: Glassnode/Coinbase Institutional Crypto Market Guide
Going forward, this week is full of risky events both from an economic data perspective and external factors. The US Federal Reserve meeting could provide further insights into the Federal Reserve’s rate-cutting path. A dovish tone from Fed Chair Jerome Powell could help push Bitcoin to new highs above the $74,000 mark.
External factors could come in the form of geopolitical risk in the Middle East, which has increased since late last week. A broader war involving Lebanon, Syria, Yemen and most likely Iran and Russia continues to worry market participants and should be monitored in the coming days.
BTC/USD Technical Analysis
From a technical perspective, Bitcoin has faced significant rejection and sell-off after approaching the $70,000 mark. This rejection now puts BTC/USD on track to retest the ascending trend line originating from the July 8 lows.
A candlestick close below the trendline on the H4 or daily chart could lead to a retest of a crucial support area where the 50-day and 100-day moving averages (MA) are located. This is also the region where the previous swing low found support, between $63,362 and $64,580.
If the price holds at this level, the bulls may gain confidence, indicating that a breakout could be imminent. This could push Bitcoin towards its all-time high once again.
On the other hand, breaking below the trend line and the support provided by the moving averages would shift the focus to the support level at $61,751 and below that, $58,862.
Support
Resistence
- 70000 (psychological level)
- 71935
- 73800
Bitcoin (BTC/USD) Daily Chart, July 29, 2024
Source: TradingView.com (click to enlarge)
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