Crypto Week: Bitcoin is Set for a New Jump

Bitcoin prices are going down by 0.6% to $29,000 per coin this week. Altcoin are suffering as they lose 3-15%. The investors’ sentiment is worsening amid rising U.S. debt yields and contraction in the stock market. 

The S&P 500 broad market index is losing 3.5% in August; the U.S. 10-year Treasuries yields hit 4.25%, the highest since October 2022. Investors are disappointed as China’s economy continues to slow down. Meanwhile, the U.S. economy is seen accelerating, as retail sales in July jumped to 0.7% MoM from 0.3% in the previous month. This situation could deliver a double strike for risky assets, as global economy is slowing down dragged by China, while the Federal Reserve (Fed) may continue rising interest rates to tame inflation amid strong U.S. economy. 

Surprisingly, Bitcoin prices form a technical pattern for a possible upside. If we look at the Bollinger Band indicator, we may see a contraction in volatility, which is similar to December 2019, July 2020, October 2020, December 2022. This led to a 10% upside for Bitcoin during these months. With this in mind, we may expect Bitcoin prices to jump above June 2022 highs at $32,000 per coin, or even higher – to $34,000-36,000 per coin. 

This upside could be initiated by a clear message of the Fed during its annual conference in Jackson Hole about a nearing end of the interest rate hike cycle. Alternatively, U.S. Securities and Exchange Commission (SEC) could approve faster-than-expected spot Bitcoin ETF after Euronext Amsterdam was the first to launch it.

Nevertheless, this possible jump of Bitcoin prices could would unlikely survive for a long time. The current low volatility period for Bitcoin prices is lasting for 25 days compared to an average 20-30 days during other similar periods. So, this upside opportunity may result in the jump of Bitcoin prices at any moment.