Bitcoin Weekly Outlook: Expect Bull Rally to Resume on Poor Labor Data – Bitcoinist.com

Bitcoinist

Bitcoin opened lower this week as prospects of an orderly transition of power in Washington and a spike in US Treasury yields hammered the cryptocurrency’s overextended rally.

The BTC/USD exchange rate slumped by up to 12.67 percent on Monday, logging an intraday low of $33,333. Some analysts claimed that it was a natural price correction, primarily after Bitcoin’s consecutive gains of up to 119 percent in the previous four weeks. They noted the price would resume its uptrend again.

How To Get Free Crypto  

Vijay Boyapati, the author of “the Bullish Case for Bitcoin,” reminded a correction of up to 30-40 percent after a wild upside rally was natural during the 2017 bull run. Retailers bought every dip to push the Bitcoin price higher. But in 2020, institutional players have replaced the retailers, which has translated into volatile bullish moves with minimal corrections.

“In the current bull market demand seems to appear after corrections between 15-20 percent,” explained Mr. Boyapati. “This is probably indicative of a difference in buyers: retail (2017) vs institutional (today).”

Bitcoin corrections appear limited in the ongoing bull run, noted Vijay Boyapati. Source: BTCUSD on TradingView.com

In retrospect, traders have also started dumping Bitcoin because the Federal Reserve’s policy is pushing 10-year Treasury noted and 30-year Treasury bonds higher. So it appears, they are securing their profits by selling the cryptocurrency near its record high levels to put them instead into bonds to earn a yield.

But…

That doesn’t signify an all-and-all dumping behavior. Traders are also beware of the Fed’s commitment to pushing inflation rates above 2 percent in the coming years. Meanwhile, the chance of additional government fiscal stimulus also provides them enough reasons to purchase Bitcoin back as their safety net.

And the possibilities are—indeed—higher after Friday’s employment report.

It showed that the US economy lost jobs for the first time in eight months in December amid rising coronavirus infection rates. The President-elect Joe Biden has earlier committed that he will prioritize fiscal support via unemployment insurance and rent forbearance in his presidency’s first days.

Coinbase Banner  

Bitcoin’s correction coincides with a pullback in the US dollar index. Source: DXY on TradingView.com

That could push the US dollar lower—and Bitcoin higher. The package is due on Thursday.

Fed Speaks, Bitcoin Peaks

The Fed chairman Jerome Powell expects to offer further insights about the US economy’s health after the latest labor report this Thursday. The market notes he would keep the interest rates on hold near-zero through at least 2023. Meanwhile, his office would keep buying government and sovereign bonds that could end up turning the benchmark yield below 1 percent.

Bitcoin forms solid weekly support near $33,000 following the early week’s plunge. Source: BTCUSD on TradingView.com

Mr. Powell earlier admitted that the Fed’s expansionary policy would continue until they achieve “maximum employment.” Unfortunately, last week’s report tells a different story, so continuous support would tend to resume Bitcoin on its path upwards.

Go to Source
Author: Yashu Gola


Recommended Crypto Services, Products and Strategies:

The first thing any crypto investor needs is is a reliable and secure Crypto Wallet.  Whether you’re looking for an online wallet, hardware wallet, desktop or mobile wallet, Crypto Renegade provides you with all the Best Crypto Wallets in each category.

Best Crypto Wallets Banner

When you’re ready to buy more crypto, or exchange your coins for others, Crypto Renegade’s list of the Best Crypto Exchanges has you covered.  The Crypto Exchanges recommended here offer everything from simplicity and convenience to advanced trading platforms and profit sharing. 

Best Crypto Exchanges Banner

If you want to learn more about the methods and tools that can be used to find Great Crypto Projects, then be sure to check out Crypto Renegade’s strategy for How To Find The Best Cryptocurrency.

Crypto Strategy Banner

For those people that don’t have any money to invest right now, or just want to understand the technology a bit more, you’ll definitely want to check out Crypto Renegade’s Free Crypto Strategy and start collecting Free Coins today!

Free Crypto Banner

What do you think about cryptocurrency? Do you have any questions about it? Be sure to leave a comment below.

This site uses Akismet to reduce spam. Learn how your comment data is processed.