History may dictate direction of Bitcoin

Financial and commodity markets analytics

The price of Bitcoin made another run for the $10,000 dollar mark in yesterday’s trading session after the US Federal Reserve decided to keep rates on hold, which was followed up by a rather dovish monetary statement where the Fed noted that interest rates may remain near zero until 2022 to cover the uncertainty surrounding the US economy.

“There is great uncertainty about the future, At the Federal Reserve, we are strongly committed to use our tools to do whatever we can for as long as it takes to provide some relief and stability to ensure that the recovery will be as strong as possible.” Said Fed boss Jerome Powell

The news was initially good for Bitcoin as an extended period of lower rates in the US will lessen the appeal of the US dollar as an investment to generate returns, which in theory, is great news for the world’s most popular cryptocurrency.

But once again the price faced stiff resistance at $10,000 and was quickly rejected which has left analysts scratching their heads and wondering just what it is going to take to finally break and remain above this elusive target.

To find a reason why Bitcoin may finally break higher, traders are looking at past history on how Bitcoin behaved last time when the supply was halved and this they believe, was one of the main reasons that the price reached an all-time high which is documented in a recent report released from Bloomberg.

The report states that it won’t be long before we see Bitcoin once again head for the $20,000 dollar mark

 “Bitcoin is mirroring the 2016 return to its previous peak. That was the last time supply was halved, and the third year after a significant peak. After 2014's 60% decline, by the end of 2016 the crypto about matched the 2013 peak,” the report noted.

“Fast forward four years and the second year after the almost 75% decline in 2018, Bitcoin will approach the record high of about $20,000 this year, in our view, if it follows 2016's trend,” the report predicts.


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