As bitcoin continues to trade sideways in a range, the next sharp move is not far from happening.
Becalmed, but not for long
Bitcoin looks to be reasonably comfortable as it sits on support at around $30,000. Not the heights of over $31,000 and a chance at breaking resistance, but a respectable sideways price action that could break soon.
In fact, it’s only 5 days since bitcoin made a new high for the year, when it rose to $31,500 and looked as though it might break the strongest resistance it’s likely to meet in this bull market.
Strong support below
However, gravity took its toll and bitcoin has returned back down to $30,000. Should this break further to the downside, there is very strong support at around $29,300 and then down to $28,800. After that there is massive support at $25,000 which would also be bolstered by the 200 MA, plus the upward trendline that started at the beginning of the year.
Dark economic clouds gather
Things are still incredibly uncertain from an economic perspective. The lower inflation sequence could be about to be broken in the US, while remaining very persistent worldwide, particularly in countries in Europe and especially in the UK.
On the horizon in August there is the BRICS summit, where a new rival reserve currency to the dollar could potentially be announced. The lack of decent Western mainstream coverage of such an earth-shattering economic event does not bode well for proper preparation from the West.
Housing crises are also drawing near in many Western countries. UK mortgage holders are getting to the end of their fixed rate mortgages and will need to renegotiate them, facing a potential rise of at least 300% on their current payments.
In addition, when the Summer comes to an end and Winter begins to demand vastly higher energy bills, an entry into recession will have been all but assured.
Bitcoin about to prove its worth
How bitcoin will perform in such an economic quagmire is really the million dollar question. So far it hasn’t become that inflation hedge that all were hoping for, but this could change.
Money printing in the West is likely to start getting ramped up again as these economies desperately fight to get themselves through the Winter. Bitcoin, the scarcest asset in the world, and out of the reach of government manipulation, will have the chance to prove that it is a haven of safety. Those able to buy bitcoin, gold, or silver may want to do so before fiat debasement makes it so much more difficult.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
