Bitcoin
Bitcoin price leaves the danger zone: what now?
Bitcoin price has once again shown its resilience as it navigates through a volatile period known as the “Danger Zone.”
This phase follows the Bitcoin halving event, which significantly impacts its price. Emerging stronger, Bitcoin is now catching the attention of investors.
Bitcoin price moves from danger to accumulation
Technical analyst Rekt Capital describes the “danger zone” as three weeks of potential downside volatility after Bitcoin Halvinga recurring cycle in its history.
In the past, this phase has seen sharp price drops, such as the 17% drop in 2016. However, the most recent cycle saw a gentler drop of 6.5%, indicating a maturing market. This recession was brief, as Bitcoin soon recovered by 15%, confidently leaving the lower limits of its reaccumulation range.
Bitcoin’s resilience underlines its consistent cycle after the halving. Despite the expected volatility, the accumulation phase began earlier than anticipated, with a strong level of support that investors quickly leveraged.
“In terms of timing, however, it is not – so we will need to wait a week for confirmation of the end of this zone for it to be official, but it is a mere formality at this point,” Rekt Capital he said.
As a result, the market response pre-emptively allayed fears, suggesting that the period of significant price corrections may already be over.
See more information: Bitcoin Halving Cycles and Investment Strategies: What to Know
Bitcoin price analysis. Source: Rekt Capital
The broader economic environment reinforces Positive Bitcoin Outlook, especially the weakening of the US dollar. Notably, macroeconomist Henrik Zeberg recently highlighted a slowdown in the US Dollar Index (DXY), which tracks the dollar against six major currencies.
Zeberg associates this trend with falling government bond yields, creating a prime environment for cryptocurrencies.
This observation is crucial given Bitcoin’s historical inverse correlation with the US dollar. When DXY hit a two-decade high in September 2022 amid aggressive Federal Reserve policies, Bitcoin fell to around $16,000. With the Fed halting rate hikes as inflation makes it easier, DXY has fallen 2% since the beginning of the month, improving conditions for Bitcoin’s rise.
“Market participants had expected a 75 to 100 basis point cut in interest rates during 2024, but the Federal Reserve has held interest rates steady in response to ongoing inflation. Current expectations are for a 25 to 50 basis point cut during the fourth quarter of 2024, with the first 25 basis point cut potentially occurring in October or November 2024 if inflation data does not worsen in the coming months,” Matteo said. Greco, research analyst at Fineqia, told BeInCrypto.
This scenario is particularly relevant because Bitcoin surpasses 1 billion on-chain transactions. It is marking its increasing adoption and integration into the global financial system. Favorable macroeconomic conditions and inherent market strength suggest that Bitcoin could see sustained growth.
“1 Bitcoin is about ten times scarcer than 1 kilogram of gold and has a similar price. It should probably be revalued this cycle for Bitcoin to turn to gold, surpassing gold parity by about 10 kilos per Bitcoin,” said Adam Back, CEO of Blockstream.
See more information: Bitcoin Price Prediction 2024/2025/2030
As Bitcoin moves out of its “danger zone,” the path forward is filled with growth potential, driven by macroeconomic trends and its innate market resilience. With historical patterns as a guide and current economic indicators that favor cryptocurrencies, Bitcoins post-halving path appears set for a bullish continuation.
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