Bitcoin struggles to match global market recovery trends
global markets have adopted an upward momentum, showcasing signs of recovery from previous lows. However, while other markets (equity for example) show resilience based on the expectation of a Federal rate cut, the crypto market is yet to register a prolonged upward boom.
The largest component of the crypto market, Bitcoin registered a loss of momentum in August (9%), however since the Fed Chair introduced groundworks towards rate cuts in September, it has registered a 5% upward move. At the time of writing this article, Bitcoin is trading at $64,070 (August 25, 12:03 PM IST) with further prediction of an upward move.
As the US Federal Reserve looks to introduce new stimulative measures, chances are that the Bulls will set aside the consolidation period and continue their momentum.
While the fundamentalists believe Bitcoin’s bullish momentum has halted, charts and oscillators paint a different story. For example, the Stochastic oscillator suggests that BTC’s rating has reached 82 on a 0-100 scale — in the overbought zone.
This notion is further bolstered if we look at BTC’s momentum data since April 2024, when the halving event took place. Following April’s halving event, BTC has failed to replicate its previous post-halving performance and has registered significant downturns.
These downturns have resulted in significant retail participation to buy in the dip, leading to the overbought zone, weakened upward momentum and profit booking. This does not mean that the latest 5% move can be classified as a news-driven periodic upward momentum, as it is yet not clear that if Bitcoin can sustain it.
