Bitcoin attempted to break above $11,700 in the new week as the Federal Reserve Economic Symposium confirmed an inflationary outlook for the US economy.
The BTC/USD exchange rate established an intraday high at near $11,729 before correcting lower on profit-taking sentiment. The sell-off appeared weak, nevertheless, for it squeezed the pair by less than a percent. A good buying pressure near $11,600 capped Bitcoin from targetting lower levels.
The price action served as a reminiscent of the ones recorded late last week. BTC/USD kept consolidating sideways inside a strict trading range defined by circa $11,700 as resistance and $11,300 as support. There were no signs of a breakout at either side, given the pair’s low volume that showed traders in a conservative state.
Nevertheless, Bitcoin maintained its medium-term bullish outlook as it held firmly above its 50-day moving average (the blue wave). The same support curve earlier helped the cryptocurrency in attempting a breakout move above $12,000. While it succeeded, a considerably higher selling pressure above the said level caused a significant price pullback towards $10,546.
Traders with medium-term price targets are now watching $10,500 as their primary support level.
Inflation
Away from technicals, the fundamental aspects of Bitcoin have improved drastically since last Thursday. On the day, the Fed chair Jerome Powell pledged to tolerate higher inflation rates in the future. He stated that the US central bank would push the consumer price targets up by more than its benchmark rate of 2 percent.
Traders perceived Powell’s dovish take as a signal of lower interest rates. The Fed, in March 2020, had slashed the benchmark lending rate to near-zero, while committing to buy Treasury and corporate bonds to aid the US economy through the coronavirus pandemic.
The dovish tone raised investors’ appetite for safe-haven and risk-on assets. As a result, US indices were on track to deliver their best bull runs since 1986. Meanwhile, gold established a record high earlier this August, with its per ounce rates notching higher at $2,075.82.
Bitcoin to $15K?
Powell’s commitment to raising inflation targets looks poised to keep bids for safe-haven higher, thus benefiting Bitcoin along the way. That has led many analysts to predict the cryptocurrency at $14,000, $15,000, and even $20,000, its record high from December 2017.
“It looks to me that Bitcoin is poised for another leg up, with an overshoot above $15k,” said Vinny Lingham, the founder of early-stage venture capitalist firm, Newtown Partners.
The analyst further expected Bitcoin to retrace from $15,000 and target levels around $14,000 for consolidation for a few weeks at least.
“I doubt this sub-$12k price holds for much longer and $10k represents strong support right now,” he added.
Bitcoin is now targetting $12,000 as its weekly upside target on great fundamental and technical sentiments.