Bitcoin Flirts With Hurdle At $24k, Why It Could Be In Early Recovery

Bitcoin continues its uptrend in the short term as the crypto market hints at further gains. The bullish momentum appears to be driven by positive earnings seasons and the US Federal Reserve’s hike in interest rates.

The financial institution announced a 75 basis point increase in interest rates to stay within market expectations. Mike McGlone, chief commodity strategist at Bloomberg Intelligence Believes The Fed may have marked the Bitcoin pivot.

By staying within market expectations, financial institutions may give room for the upside to expand in the coming months. The Federal Reserve is trying to ease inflation in the US dollar, according to the Consumer Price Index (CPI).

This metric stands at a 40-year high but appears set for a downward trend. A Bloomberg Intelligence analyst claims that lower prices across the commodities sector hint at this possibility and could provide the Fed with support to “soften the rate hike with a sledgehammer”.

This would benefit stores of valuable assets, such as gold, US Treasuries and Bitcoin. McGlone argues that the cryptocurrency has been suffering because it is considered an emerging asset with relatively new technology.

This flaw may fade into the background as the Bitcoin adoption curve increases against aggregate supply. As shown below, if the cryptocurrency follows the internet adoption curve, it could enroll over a billion users by 2025.

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BTC adoption curve compared to the internet. source: vesbitcoin via Michael Levine

In the short term, the price of BTC may benefit from a easing in the macroeconomic factors that play against it. The next major event will be the July CPI reading which will be released in August, which could produce more fuel for the current bullish price action. McGlone wrote:

The “meet by meeting” comment (from the Fed) may signal the pivotal point for #Bitcoin to resume its tendency to outperform most assets. New and untested coins are quickly becoming nervous relative to the benchmark cryptocurrency, likely in the early days of recovery from a sharp decline.

Could Bitcoin Resume Its “Tendency to Outperform”?

More data Submitted By McGlone showing lower 250-day BTC price volatility against Bloomberg Commodity Spot. As seen below, whenever the trends of this metric are negative, the bitcoin price reacts moving in the opposite direction.

Bitcoin price volatility is dropping against the Bloomberg Commodity Index indicating a possible price hike. Source: Bloomberg Intelligence

Lower BTC price volatility over 250 days marked the beginning of the 2012 and 2017 recovery. In this sense, McGlone noted:

Bitcoin’s lowest-ever volatility against the Bloomberg Commodity Index (BCOM) could herald a resumption of the cryptocurrency’s tendency to outperform (…). If history is any guide, Bitcoin’s volatility against commodities is likely to recover when the crypto heads towards new highs.

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