- Things are looking up for Bitcoin.
- Several macroeconomic factors could contribute to a new rally.
- The Federal Reserve hinting at a stop to new interest rate hikes is just one factor.
Positive signs that the world economy is healing will help drive Bitcoin higher in the coming months, according to analysts.
“The stars are aligning and momentum building for an explosive leg higher. It’s go time,” David Brickell, head of international distribution at FRNT Financial, and former forex trader Chris Mill, wrote in their latest “Connecting the Dots” newsletter.
As stock markets rally to records, “it’s a matter of when, not if Bitcoin also makes new highs.”
The comments come after the price of Bitcoin hovered around $60,000 for most of the last month, the two analysts said.
Inflation
Federal Reserve Chair Jerome Powell seemingly took the threat of raising interest rates off the table at the central bank’s meeting last week, Brickell and Mill said.
While that didn’t equate to an easing of its counter-inflationary policies, the analysts suggested that the comments raised the chances of fresh cuts further down the line.
Powell’s comments came after April’s US consumer price data was lower than predicted, a sign inflation may be coming under control.
US debt
The analysts also predicted that the US is at the start of a new bond rally.
When bond rallies are expected by the market, bond prices tend to increase, leading to lower yields or interest rates on bonds as coupons are fixed.
Lower US yields often make the US dollar less attractive to investors, leading to a weaker dollar.
That could drive investors to seek out alternative assets like Bitcoin as a weaker dollar makes the crypto more attractive for those seeking higher returns, the analysts said.
ETF inflows
Spot Bitcoin exchange-traded fund trading picked up last week will also add momentum to the rally, Brickell and Mill said.
Their comments come as filings revealed that major institutional players like Millennium Management, and even public investment boards such as the State of Wisconsin Investment Board have bought shares in the US spot Bitcoin ETFs.
The surge in institutional interest points to a broader acceptance of Bitcoin into mainstream financial portfolios, the analysts wrote.
The ballooning interest will bolster the case for further price increases in the coming months, Brickell and Mill said.
China
China stepping up its stimulus measures last week is a fourth factor potentially impacting the price of Bitcoin.
Last week, it flagged an “ultra-long bond issuance” to support investment and a rescue package to stabilise its ailing property sector.
Those measures will improve liquidity in the sector, which Brickell has previously noted is “gonna be good for Bitcoin.”
Crypto market movers
- Bitcoin is trading flat at $66,940 over the past 24 hours.
- Ethereum is trading flat at $3,107.
What we’re reading
- Galaxy Ventures bemoans ‘challenging’ market as crypto VC funding set for measly 2.4% gain — DL News.
- Kraken Mulls Removal Of Tether (USDT) Amidst New EU Regulations — Milk Road.
- ‘Memes’ Are One Of The Strongest Growing Crypto Narratives in 2024: Kaito AI — Unchained.
- El Salvador’s Strategy For Stacking Sats — Milk Road.
- Almost 40% of Asian institutional crypto holders want more exposure — here’s why — DL News.
Sebastian Sinclair is a markets correspondent for DL News. Have a tip? Contact Seb at sebastian@dlnews.com.
