Bitcoin Is Ready For an Explosion Towards $10k Price Level; Here is Why
In the early hours of May 27, Bitcoin was able to move above $9k to attain $9.2k, after it spent some days below $9k price level. The move may seem small when it comes to percentage basis, but it has remarkable significance in terms of technical factors.
The $9k level has since become a key technical and psychological level for Bitcoin. Bitcoin’s ability to surge above it once again presents some signals which suggest a possible rally above its monthly high of $10k in the near-term.
The first signal is Bitcoin derivatives market flashing bottom indicator. According to a renowned trader known as RJ_killmex on Twitter, OKEx quarterly BTC futures were trading under the spot price of BTC on Coinbase and Bitstamp over the last weekend when the price of Bitcoin dipped to the local bottom at about $8.8k. Likewise, the derivatives recorded negative funding rates in the weekend and it is usually taken as the reversal of a bear trend.
The second signal has to do with Bitcoin network’s on-chain activity which has remained bullish, despite the retracement from the $10k highs. Towards the end of last week, Santiment noted that BTC’s Network Value to Transactions Ratio (NVT) was still healthy.
The third signal is China’s Yuan dip due to the mounting tensions between the U.S. and China which could boost Bitcoin. The tension is about China’s new security law proposed for Hong Kong which the world is responding to, thereby prompting Yuan’s continuous slide, even as it attained fresh lows in recent times. U.S. officials and advisors have floated sanctions against China, specifically hurting the Yuan, and analysts believe this could be a boosting factor for Bitcoin.
The last signal is stimulus packages of governments which involve printing of money. Global markets tracker FXHedge noted that the government of Japan wants to implement a stimulus package worth $1.1 trillion. Individuals like Paul Tudor Jones think that such a stimulus package is capable of causing monetary inflation, thereby possibly driving demand for scarce assets such as Bitcoin.