Bitcoin (BTC) begins its climb back to the highs

Fear is still rearing its ugly head in markets, and this may not subside until the US tariffs situation is at least partly resolved, and the geopolitical environment improves. However, Bitcoin reached an oversold condition, and could now be heading back to the highs.

Market fear remains strong

The market is still not convinced. Fear remains strong in traditional as well as crypto markets. The tariff situation, especially in the case of China, appears to be going nowhere. Two intransigent presidents are waiting for the other one to back down. This could take a long time.

10-year yield has to come down

At the same time, the Trump administration has to roll over around $7 trillion in debt that matures this year. In order for this to be done so that future interest payments can be accommodated, Treasury Secretary Bessent needs to bring the 10-year bond yield down. Trying to get big money investors to roll their funds into government paper bonds rather than equities, gold, or Bitcoin, is not going to be an easy task.

The days of money fleeing into the relative safety of government bonds during market crashes probably arent over, but a willingness to buy and hold more than short term bonds just doesnt appear to be there.

A monetary reset?

Its in this kind of environment that the term monetary reset has started to be increasingly mentioned. Scott Bessent, has even said that he wanted the job of Treasury Secretary so that he could play a part in designing a new monetary world order.

So what role could Bitcoin play in this? This is one for the likes of Bessent, and his global counterparts to figure out. An asset that cannot be controlled by any government runs counter to every single monetary system in the history of the world, and would therefore perhaps not be embraced gladly by most, although the US has gone a long, long way in a very short amount of time to show that it now understands the power of Bitcoin.

Why Bitcoin should go up

Putting aside all this future conjecture for now, one has to look at Bitcoin and decide whether its worth backing over a time frame of more than just a few weeks.

While there is always the possibility that Bitcoin could go down to $69,000 if there is another stock market crash, huge horizontal support at that level would be likely to hold. Yes, in particular circumstances it could even lose that support and go into a bear market, but this is not likely to happen.

The reason why is that Bitcoin is the hardest form of money. This means that it cannot be debased by an entity issuing more of it than the original 21 million supply.

On the other hand, as far as fiat currencies are concerned, governments are preparing to print massive amounts more, in order to be able to have the liquidity to fund budget deficits, stimulate economies, and manage their debts.

Why would the market sell off Bitcoin into a bear market when the alternative assets are just so inferior, and especially given that fiat currencies are debasing so rapidly?

$BTC consolidates above breakout

Source: TradingView

The short-term time frame for Bitcoin is showing that the price is now beginning to consolidate above the descending trendline. A double bottom was made at $74,500, and the next target for the bulls is a trend break. This will occur if the price can get above $88,630. If this takes place, the next big resistances are at $91,000 and then $95,000.

Mini disbelief phase playing out

Source: TradingView

After a nigh-on 3-month correction since the all-time high at $109,000, most traders might be forgiven for thinking that this was going to continue, and its probably for this reason that many are holding back now. A mini disbelief phase might be playing out, but once Bitcoin gets back above $88,000, and for many the round figure of $100,000, they will probably be rejoining the train.

The small and solitary candle, that is above the descending trendline, looks fairly insignificant as yet, but with the RSI indicator line also punching through a descending trendline, and with the Stochastic RSI indicators approaching the confirmation of a cross up of the 20.00 level, things could start to play out quickly.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Text source: Crypto Daily™

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