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Can Bitcoin (BTC) Price Escape Consolidation Below $71,000?
The price of Bitcoin (BTC) is known to drive the cryptocurrency market, but the cryptocurrency king tends to react to macrofinancial conditions.
Since these conditions have been quite positive lately, it seems that BTC may have a chance to escape the consolidation and mark a new ATH.
Impact of US financial markets
The price of Bitcoin reacted positively to the recent change in tone of the Federal Reserve. Earlier this week, the inflation rate, measured by the consumer price index (CPI), reduced to 3.3% Year after year.
Shortly thereafter, the Federal Open Market Committee (FOMC) also announced that it would keep interest rates unchanged between 5.25% and 5.50%. The producer price index (PPI) also stood at 2.2% year-on-year on Thursday, as expected and lower than April’s 2.3%.
US PPI. Source: Inclination – X
The combined positive outlook has created favorable bullish conditions for the price of Bitcoin. The Bitfinex research team also believes that BTC is looking at long-term growth. Bitfinex analysts told BeInCrypto,
“Since the Fed has decided to maintain current rates, Bitcoin may experience a short-term trend volatility as the market adjusts to the news. However, the overall trend could remain positive, especially if the broader economic outlook continues to improve.”
Discussing the potential impact on ETF flowsanalysts said,
“ETF flows could stabilize with a hold decision, as investors await clearer signals from the Fed’s future policy moves. Spot Bitcoin ETFs could see steady inflows, but momentum could be less pronounced than in a cut scenario of rates. The launch of Ether ETFs could still generate significant interest, potentially leading to diversified investments in both Bitcoin and Ethereum ETFs.”
Therefore, Bitfinex analysts believe that Bitcoin could consolidate around current levels or post moderate gains as investors remain optimistic about future rate cuts throughout the year.
BTC holders are also of this opinion, as their belief seems to be making a comeback. The average age of the coin is seeing a rise again after noticing a decline in March and again in May.
Average coin age is a metric that measures the average age of all coins in the network, indicating the average holding period of the cryptocurrency. It helps evaluate investor behavior and potential market trends by showing how long coins have remained at their current addresses.
Rises in this metric suggest that investors are HODLing, while declines suggest increased movement of tokens across the network.
To know more: Bitcoin Halving History: Everything You Need to Know
Therefore, Bitcoin price may see some sideways movements before starting to recover again.
BTC Price Prediction: Model Validation
The price of Bitcoin, which was trading at $67,800 at the time of writing, has consolidated below $71,000. Recent attempts to close above that level failed and BTC fell below $68,500, another crucial support level.
However, observing the macro-time horizon, it can be noted that BTC is waiting for a breakout following a Wyckoff scheme. The Wyckoff model is a technical analysis method that describes the cyclical price behavior of financial markets. It consists of accumulation, reload, distribution and bearish phases, which help traders identify potential market trends and reversals.
According to this pattern, a rise beyond the all-time high of $73,736 is possible. However, as mentioned above, this would likely occur after a period of consolidation.
To know more: Bitcoin (BTC) Price Prediction 2024/2025/2030
But if Bitcoin price drops below consolidation before this recovery the bullish thesis will be invalidated. BTC could also lose the $67,000 support, taking the cryptoasset to lows of $63,000 or lower.
Disclaimer
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