The price of bitcoin fell 2% today, falling to $26,757 over the past 24 hours and undermining hopes that the cryptocurrency’s recent consolidation had set it up for a breakout.
BTC’s current price means it has barely moved lower over the past week, although the coin is up 2% since hitting a low of $26,270 on May 12.
It has gained 61% since the beginning of 2023, with this medium-term increase BTC is poised for further correction in the coming months.
In fact, with some suggesting that the global economy will perform better than forecast earlier this year, bitcoin may be well positioned to ride a wave of renewed optimism, especially if the US Congress comes up with a solution to its latest debt ceiling crisis. agree to
Where will bitcoin go next? Price Prediction As BTC Rebound From Recent Lows
While BTC fell today, its chart shows that it is in a good position to rebound.
Notably, its Relative Strength Index (purple) has started rising again after dipping slightly below 30 this morning, indicating a bullish recovery.
Similarly, BTC’s support level (green) escaped today’s decline, which means that the cryptocurrency is unlikely to see further declines in the near term.
And while bitcoin’s 30-day moving average (yellow) has yet to break below its 200-day average (blue), the fact that its price has actually started rising over the past hour suggests that it may. Not possible.
Of course, while bitcoin’s relative price stability over the past few weeks would indicate that it may not move wildly any time soon, there are several upcoming developments that could provide it with a catalyst for a larger movement.
In particular, the US Congress and the White House need to agree on a solution to the current debt crisis. US likely to default on its debt obligations on June 1 If any kind of answer is not agreed.
Such a default could be disastrous for bitcoin and the cryptocurrency market, even though some extremists believe that a weaker US dollar will play into BTC’s hands.
This could potentially accelerate the recent flight to cash and away from riskier assets like bitcoin, creating liquidity – which already at a very low level – to dry even more.
However, it is worth pointing out America has fought over its debt limit beforeAnd in each case a default has been avoided.
Thus, the odds are tilted towards another resolution, even though it looks like lawmakers and the US President are once again leaving it at the 11th hour.
improvement in the economic picture
And assuming that a full-blown crisis has been averted, recent signs suggest that the US and global economy is slowly recovering.
Recent financial reports coming in from the US generally exceeded expectationsWhereas Eurozone avoided entering recession in the first quarter of the year.
While an economic recovery is likely to be gradual (and Some more rate hike possible), most of the available evidence suggests that things are improving overall rather than getting worse.
This should mean that bitcoin will see a gradual influx of further investment, a process likely to be accelerated by next year’s halving, which is due to take place at some point in April or May.
As every previous halving has shown, a 50% reduction in the bitcoin block reward increases the price of the cryptocurrency.
However, this effect is not immediate, as the peak in 2020 will not be seen until November 2021.
That said, the market can expect bitcoin to begin rising in the months leading up to the completion of the halving, with the cryptocurrency potentially in line with a classic end-of-year rally.
More immediately, we can also expect BTC to rally in response to the resolution of the debt limit impasse, potentially moving higher to $27,000 afterwards.
From there, further good economic news could propel bitcoin above $27,500, $28,000, and even higher.
And given how restricted the exchange’s liquidity remains, don’t be surprised if BTC makes some huge jumps along the way.