Bitcoin closed a daily candle above $20,000 on Tuesday, marking the highest daily close in about 24 days. This comes after the trading range of the $19,000-$20,000 level during the second half of September.
Foreign pressure on the Fed to curb rate hikes and a low supply of bitcoins on crypto exchanges boosted the price of BTC.
The Short Term Evaluation of Bitcoin Traders
As markets watch the BTC price move on crypto exchanges this month, traders are assessing bitcoin’s short-term outlook. The three-month BTC price decline represents market ambivalence caused by a number of supply and demand determinants. Hashrate is rising, long-term holders are not selling, exchange supply is low, and institutional interest continues to grow cautiously.
In the short term, Bitcoin could also be setting up for a rally, as it could be a bearish market with most potential exits taking a wait-and-see approach.
This is what happened after the price of bitcoin made a strong correction during the first part of the year in 2018, as it did in 2022. In 2018, BTC traded with a range from August to November and sharply corrected more than half by December. .
The Long Term Bull Case for BTC
The global macro situation today is precisely similar to that of the world ten years ago. Lawmakers and central banks have supported the economy with massive emergency stimulus. They have achieved this by increasing the money supply.
Just as they did ten years ago to address the 2008 financial crisis, they looked back at recent history. They saw that they got away with inflating the money supply and doubled what they did last time.
The result, as newly created money through a centrally planned artificial expansion of credit, will continue to devalue the rest of the currency as it circulates through the economy. At the rate of inflation the US Federal Reserve Bank is aiming for an annual rate of 2%, it takes about 20 years to redistribute half the value of the money supply.
Bitcoin was first launched in 2009 as a response to the massive monetary and fiscal stimulus regime of the 2008 era. Over the next decade, it became the investment instrument with the highest ROI since its beginnings of history Markets then saw its value in hedging fiat inflation.
Today, Bitcoin already has much more established infrastructure and notoriety. That’s why big players like Michael Saylor and Kevin O’Leary expect the suddenness and intensity of previous rallies.
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