4 reasons to be bullish on Bitcoin in the short to medium term

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Bitcoin price continues to consolidate in the trading range between $27,800 and $30,000. Even though the buy side currently seems to have lost momentum and the bears feel in control, there are plenty of good arguments why the price of Bitcoin will reach new yearly highs in the short to medium term.

4 hour chart of Bitcoin

A look at Bitcoin’s 4-hour chart shows that the price has been writing higher lows since the price hit a low of $27,000 on April 24. A higher low occurs when the price reaches a new low that is higher than the previous low, without a low preceding it.

Thus, the current price movement of BTC indicates an upward trend. The $30,000 level should be the next target as long as BTC remains above $28,800.

BTC records higher lows, 4-hour chart l Source: BTCUSD on Tradingview.comUS Banking Crisis

Another driver of the Bitcoin price in the short to medium term may be the ongoing US banking crisis. The past few weeks have shown that BTC reacted strongly to the news and mostly saw an increase. Ultimately, Bitcoin was created for this very purpose: an escape from fractional-reserve banking.

For this reason, it’s also no surprise that Bitcoin saw its strongest correlation to gold in two years. Physical gold has reached new all-time highs in recent days, Bitcoin could be boosted by this.

The chief economist of the $646 billion asset manager AllianceBernstein, Jared Bernstein, recently acknowledged that Bitcoin would establish itself as an alternative financial system in times of bank failure and urged people to buy Bitcoin.

Bernstein predicted that the US banking crisis is far from over, adding: We believe Bitcoin will re-emerge as a faster horse than gold.

Fed interest rate break in June?

Even though financial markets initially reacted lower at Wednesday’s FOMC press conference, the market does not believe the US Federal Reserve (Fed) will raise interest rates again in June. Indeed, the market expects a pivot, that is to say a first break in rate hikes on June 14th.

CME’s FedWatch tool shows that an overwhelming 99.1% currently expects interest rates to pause in June. More than 85% expect a first rate cut as early as September and at least three rate cuts by the end of the year.

And even JP Morgans Davis believes that this is definitely the end of the rate hike cycle for the Fed and that a Fed pivot could come as early as September. Due to the credit crisis and banking problems, the Fed will be forced to inject liquidity into the market prematurely, BTC will benefit greatly.

Bitcoin will rise if history repeats itself

As analysts at Rekt Capital write, Bitcoin price is currently in a consolidation phase similar to 2019. If history repeats itself, BTC has yet to see its biggest gains in the coming months. .

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#BTC 2019 vs 2023

Different or similar?$BTC #Crypto #Bitcoin pic.twitter.com/8CCmz224av

Rekt Capital (@rektcapital) May 5, 2023

Featured image from iStock, chart from TradingView.com

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