BITCOIN FORECAST: BTC/USD PRICE BOOSTED WITH PRECIOUS METALS AMID US DOLLAR NOSEDIVE
- Bitcoin price action blows past key technical resistance as BTC/USD jumps 20% in a week
- Bullish market activity underpins top cryptocurrencies and precious metals as USD weakens
- The FOMC decision on deck and potential for a US Dollar reversal leaves Bitcoin at risk
BTC prices have ripped higher over the last few trading sessions. Popular cryptocurrencies – such as Bitcoin, Ethereum, Ripple, and Litecoin – are soaring with the US Dollar pacing a big drop for July. Bitcoin performance appears to have benefited from mounting demand for traditional anti-fiat assets like gold and silver. This largely stems from a staggering rise in the global money supply due to the coordinated policy response from governments and central banks, which flooded the financial system with cash.
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An increase in the supply of money causes its value, or price, to decline assuming all other variables are held constant. That said, it is of little surprise that non-traditional currencies with limited or fixed supplies, including bitcoin and gold among other anti-fiat assets, have climbed considerably over recent months.
US DOLLAR IMPLOSION SENDS BITCOIN SURGING WITH GOLD & SILVER PRICES IN ANTI-FIAT BID
While the US Dollar implodes, and the direction of precious metals goes parabolic with gold and silver trading higher by 28% and 35% respectively year-to-date, less-loved Bitcoin has begun to reel in market attention and play catch up to its anti-fiat peers. The recent resurgence of Bitcoin and other cryptocurrencies has catapulted BTC price action higher by more than 20% since I highlighted potential for a topside pennant breakout on June 16.
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BITCOIN PRICE CHART: DAILY TIME FRAME (07 FEB TO 28 JUL 2020)
Bitcoin priced in USD currently fluctuates around $11,000 and follows the explosion above its pennant pattern resistance line formed by a string of lower highs since May. That constructive technical setup, which was also underpinned by a Bollinger Band squeeze, helped provide BTC/USD price action with a big enough boost for the cryptocurrency to surmount its prior 2020 swing high near the $10,600-level.
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Looking ahead, Bitcoin could continue its steep climb fueled on the back of its bullish anti-fiat narrative. Conversely, an aggressive rebound attempt staged by the US Dollar, which is underscored by FOMC correction potential in the wake of a scheduled Fed meeting announcement this Wednesday, might strongarm Bitcoin back lower.
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