Bitcoin Set For 70% Surge If Charts Are Correct

Bitcoin is hurtling toward a quarterly gain bigger than any since the start of 2021, the year when it went on to hit a record high.

Some analysts argue the token is being viewed as a hedge against the woes in the US and European banking sectors and benefiting from expectations of looser monetary policy to cushion economies from the fallout of those troubles.

“The behaviour of the price through this crisis is going to attract more institutions,” Ark Investment Management’s Cathie Wood said on Bloomberg Television, referring to the unravelling of three US lenders and the emergency takeover of Credit Suisse Group AG by rival UBS Group AG.

Bitcoin’s revival has helped the digital-asset market add about US$390 billion (RM1.74 trillion) in value in 2023 after a US$1.5 trillion rout last year. The rebound has weathered crypto bankruptcies, a US regulatory crackdown and the temporary de-peg of a key stablecoin that’s meant to hold a constant US$1 value.

The rally has paused this week, leaving the token near US$28,000, as traders await the latest US Federal Reserve (Fed) policy decision. Key charts suggest any hiatus or pullback is likely a temporary speed bump on the way to further gains.

A US$300 billion increase in the Fed’s balance sheet last week — part of efforts to support liquidity in the US banking sector — is positive for risk assets and has aided crypto and gold, Chris Weston, the head of research at Pepperstone Group Ltd, wrote in a note.

The technical study indicates a price objective of about US$35,000.

“With interest-rate markets gone from pricing in rate hikes to pricing in rate cuts, there is now a gentle tailwind supporting Bitcoin,” Tony Sycamore, a market analyst at IG Australia Pty, wrote in a note.

Bitcoin has jumped into an area marked by a weekly Ichimoku cloud, an indicator that uses mathematical formulas to help define levels of resistance and support. The break into the cloud signals the potential for further increases.

The token could “ride the narrative as a system hedge”, and draw succor from central banks being forced to inject liquidity to tackle bank-sector wobbles, Bendik Schei, the head of research at K33, wrote in a note. – Bloomberg

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