Bitcoin Bull Market Has Plenty Steam Left, Indicators Suggests
Bitcoin has risen over 40% this month, reaching a new record price of $66,879 on expectations that the recently listed ProShares exchange-traded fund (ETF) tied to the cryptocurrency’s futures would bring more mainstream money into the market.
Such a steep ascent often has investors assessing whether the party is coming to a close, especially when popular technical indicators like the relative strength index (RSI) signal overbought conditions, as with bitcoin.
However, blockchain metrics like the MVRV Z-score and a lesser-known chart-based indicator, Mayer Multiple, suggest the bull run has plenty of steam left.
Both indicators back up analysts’ expectations of a continued price rally toward $100,000 in the coming months. That said, it may not be a smooth ride, and the cryptocurrency may see price pullbacks depending on the degree of leverage in the market.
The cryptocurrency remains vulnerable to macro risks and potential risk-off in traditional markets.
According to Reuters, there is a growing view in the market that the U.S. Federal Reserve may soon feel compelled to scale back stimulus more aggressively to contain inflation. “U.S. traders are now pricing a full rate hike into the Fed’s September policy meeting next year. But by that time, New Zealand’s central bank would have hiked five times, Canada’s three times and England’s four times,” Bloomberg report said.
Should the market start pricing more aggressive Fed rate hike bets, risk assets, including bitcoin, may face some selling pressure.
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