Bitcoin Is Moving Higher, Don’t Count On New Highs Yet
The Bitcoin/cryptocurrency market has cooled off, but that is a good thing. The market is up strongly YTD and a little consolidation is a healthy market mechanic, it sets the market up to continue moving higher later this year. Over the last few days the world’s leading cryptocurrency by market cap has been edging higher and taking most of the crypto market with it. The candles formed look pretty bullish and are supported by the indicators so higher prices are likely. The problem is that, without a catalyst, the move is likely to fizzle out before new highs can be set. Even if a new high is set, it will likely trigger another round of profit-taking/market rotation that will keep BTC/USD moving sideways for the next few weeks at least.
Longer-term, I still expect to see BTC continue its rally and possibly as soon as this fall. The signs are growing, Bitcoin is recapturing market share at a steady clip and the hash-rate keeps setting new highs. Coinmarketcap shows Bitcoin dominance approaching 72% and 2+ year high. Blockchain.com shows Bitcoin’s hash-rate has resumed its parabolic move higher as more and more miners get into the act. The bottom line is that Bitcoin is still the number #1 cryptocurrency and the market is flooding into it. It may take a little while longer to work though technical resistance at $13,000 but, once done, the move to new highs will be sharp and severe.
The #1 driver of BTC price over the next 8.5 months is going to be the halvening. As the number of miners and holders increases demand will increase and the halvening is going to cut new-supply in half. Just Litecoin did this year, BTC/USD should see a market-leading rally that adds several hundreds of percentage points to its value. LTC moved up nearly 500% from the low of 2019 to the high pre-halvening level. LTC has since pulled back where it is presenting another buying opportunity. Just like this year, next year when the BTC halvening rally hits full-stride it will help lift the entire crypto market, and Litecoin along with it.