bitcoin price

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The Bitcoin price is steadily trading above critical support levels and might extend its bullish trend in the coming days. The cryptocurrency positively reacted to the current macroeconomic conditions despite the U.S. Federal Reserve (Fed) promising to keep hiking interest rates. 

At the time of writing, the Bitcoin price trades at $20,700 with a 3% loss over today’s trading session and sideways movement over the previous week. This period has been profitable for digital assets against traditional assets, such as equities, for the first time. 

BTC’s price moving sideways on the daily chart. Source: BTCUSDT Tradingview

Reasons Why The Bitcoin Price Will Stay Bullish

Investment firm Cumberland believes the Bitcoin price is building the foundation for a more significant uptrend. The firm claims this bullish price action will be supported by macroeconomic factors and a “growing drumbeat of progress in digital asset adoption.”

Cumberland believes the U.S. dollar, as measured by the DXY Index, shows weakness on the first of these factors. The currency has been rallying over the past months. This bullish price action negatively impacted the Bitcoin price and the value of other assets, including equities and gold. 

A crash in the DXY Index will provide Bitcoin with some room to run into Q4 2022. Over the past two years, the cryptocurrency saw a new all-time high in November and December. This period stands as one of the most bullish for digital assets in its history. 

Cumberland added the following on the DXY’s price action, and the reason for its weakness: 

This rally seems to have topped out, likely the result of expectations that the Fed reverse course by mid-2023. In other words, the 5.5% market-implied terminal rate is a lot scarier when short term rates are locked 0% than when they’re hovering around 4%.

The current status quo will persist unless an unexpected macro-events, such as a higher-than-expected inflation print. Other sources of uncertainty, the Russian-Ukraine war issues with supply chains, reached a “state of choppy equilibrium.”

U.S. Politics Can Favor Crypto

In the short term, the is growing uncertainty around U.S. politics. Tomorrow, the country will elect a new Congress. The results of this election will have significant consequences for the crypto market and the global economy. In that sense, the Bitcoin price is more likely to trend higher. 

A Republican control Congress could favor the Bitcoin price and digital assets in the crypto industry. In contrast, Democrats are perceived as hostile or less inclined to legislate in favor of the nascent industry. On a possible Republican victory, Cumberland wrote:

In the event that Republicans do manage to take back control of the legislative branch of government, it would seem unlikely that they usher in an era of fiscal austerity. Instead, we should expect a lean towards lower taxes, higher stimulus, and easier regulation. Similarly, we should expect a less adversarial environment in Washington for crypto (…).



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Image and article originally from www.newsbtc.com. Read the original article here.