By
Godfrey Benjamin
May 10th, 2024
A strong price action in Gold this month has provided a bullish price momentum to Bitcoin with a price surge leading to $31,000. The macro conditions favour Bitcoin and Gold.
The world’s largest cryptocurrency Bitcoin (BTC) has continued its price rally eyeing a move above $31,000 in the recent push and taking bullish cues from traditional assets such as gold. As of press time, Bitcoin (BTC) is trading 2.14% up at a price of $30,660 with a market cap of $598 billion.
Bitcoin saw a significant 14% price increase this month, while gold, in contrast, recorded a more modest gain of 6.7%. It’s worth noting that gold’s increase came a week prior to Bitcoin’s surge, possibly due to escalating tensions between Israel and Hamas and ongoing speculation regarding the Federal Reserve’s monetary policy, suggesting the anticipation of an inflationary period. In an email to CoinDesk, Greg Magdini, director of derivatives at Amberdata, said:
“Rates are the biggest mover in macro right now, but surprisingly, rate-sensitive assets, such as Gold, are also seeing bullish momentum… this bodes well for BTC”.
Magadini explained that historically, wartime expenditures tend to drive inflation. Also, the Federal Reserve indicated a potential halt in interest rate hikes amid a strong U.S. economy, which creates a favorable environment for both gold and Bitcoin, especially given the optimistic sentiment surrounding exchange-traded funds (ETFs).
“BTC remains an even more interesting asset, given perfect-portability, inflation hedge, and government agnostic wealth preservation. Combine the optimism around the BTC ETF and the Ripple lawsuit, and altogether, this strikes me as a very bullish development for BTC as a whole,” Magadini noted.
Bitcoin (BTC) Price Can Face Some Pressure
Bitcoin is currently experiencing a battle between buyers and sellers around the $30,000 price point. An encouraging sign is that buyers have maintained their ground without significant losses.
The ongoing consolidation at this level implies that the bulls are not rushing to lock in profits, indicating their anticipation of a potential upward move. This could potentially drive the price into a resistance zone ranging from $31,000 to $32,400.
Conversely, should the price decline from $31,000, the BTC/USDT pair might fall to the 20-day exponential moving average, positioned at $28,160. A rebound from this level would motivate the bulls to make another attempt at overcoming the overhead resistance.
However, if the price falls below the 20-day EMA, it could disrupt the positive sentiment, leading to a continuation of the BTC/USDT pair trading within the range of $24,800 to $31,000 for an extended period.