Bitcoin Shows Signs of Potential Breakout, Says Analyst
Bitcoin (BTC), the largest cryptocurrency by market capitalization, is displaying signs of a potential breakout, according to analyst Miles Deutscher.
Historically, October has been a strong month for BTC, and recent trends indicate that the cryptocurrency may be on the cusp of a significant upward movement. In the past week alone, the Bitcoin price has surged over 13%, approaching its all-time high of $73,700 set in March of this year.
Increased Global Liquidity and Low Supply
Deutscher notes that Bitcoin has been consolidating above critical support levels for much of the year, positioning it for potential expansion. Despite previous failed breakouts leading to trader distrust, the analyst believes that the current environment may present an opportunity for a substantial price increase.
Many retail investors remain on the sidelines, as evidenced by Bitcoin’s ranking on Coinbase and declining Google search interest in the cryptocurrency. This suggests that the market force known as fear of missing out (FOMO) has yet to kick in among investors.
The macroeconomic backdrop also supports Bitcoin’s potential for further gains. Increased global liquidity, now at its highest level in three years, has historically had a positive impact on Bitcoin’s price. Deutscher also highlights that as equity markets recover, Bitcoin typically follows suit, often closely correlating with the S&P 500. Additionally, Bitcoin’s supply on exchanges has reached an all-time low, indicating a potential supply squeeze.
October to April as ‘Boom Period’ for Bitcoin
Deutscher also points out the upcoming US presidential election, adding another layer of complexity to the market. The analyst speculates that a victory for former President Donald Trump could lead to favorable market reactions, with Bitcoin potentially positioned as “a pillar of US financial stability.”
The Republican candidate has made promises, including plans to make Bitcoin a reserve asset for the country to help reduce the $35 trillion national debt, supported by pro-crypto Senator Cynthia Lummis.
Seasonality also plays a role, according to the analyst. Deutscher explains that the period from October to April is traditionally seen as a “boom period” for cryptocurrencies. While Bitcoin may face resistance around $70,000, Deutscher believes a breakout is likely, especially given the substantial short interest in Bitcoin.
At the time of writing, BTC is trading at $66,940, down 1.5% in the 24-hour timeframe, encountering significant resistance at the $68,000 level. Featured image from DALL-E, chart from TradingView.com