Last week, Bitcoin's price increased by $5,000, reaching $34,267. The surge seemingly came out of nowhere, as there were no significant news or events that could have triggered it. However, technical buy signals were formed, making the exact reason for the world's first cryptocurrency's growth less relevant. Recently, Bitcoin has been experiencing a period of stagnation, which is consistent with its behavior over the past year or two: sharp increases or decreases followed by weeks or months of flat movement. Therefore, surpassing the $34,267 level shouldn't be considered a strong buy signal. It's better to focus on other levels and indicators.
Meanwhile, the fervor surrounding Bitcoin continues to intensify. A previous report suggested that the recent growth spurt in Bitcoin's price could have been speculative, potentially aimed at boosting its value before a possible SEC approval of a Bitcoin ETF. Many investors and experts believe that Bitcoin's price will continue to rise, as it is seen as a superior alternative to gold. The world is gradually becoming more digitized, and owning Bitcoin and other cryptocurrencies is becoming easier and serves as a great alternative to fiat currencies, which are constantly depreciating.
Stanley Druckenmiller, a former colleague of George Soros, expressed a similar opinion. He stated that the younger generation sees Bitcoin as modern-day gold. Druckenmiller was surprised by Bitcoin's emergence and noted that young people increasingly view it as a savings vehicle, losing interest in gold, which has served as a store of value for 5,000 years. The billionaire mentioned that while he appreciates both Bitcoin and gold, he unfortunately doesn't own any Bitcoin, although he feels he should.
It's worth mentioning that the Federal Reserve is set to hold a meeting tomorrow evening, and the outcomes are likely to be uneventful. This suggests that no significant reaction is expected in the cryptocurrency market following the event. At the same time, it should be noted that U.S. monetary policy continues to tighten, with interest rates at decade-high levels. As a result, Bitcoin may still face downward pressure due to high interest rates, attractive bank deposit yields, and treasury bonds. There is still skepticism regarding Bitcoin's potential for endless growth, and currently, there are no new buy signals.
On the 24-hour timeframe, Bitcoin has reached the $34,267 level and has once again entered a period of stagnation. This level is no longer useful for generating signals. It's likely that some time will be needed for the market to settle down and decide on its next course of action. The $34,267 level may need some adjustment, depending on how long Bitcoin remains stagnant.
