The first week of August has been positive for Bitcoin traders who are feeling bullish about holding long positions on the world's most valuable digital currency. After a few uncertain days when it seemed as if BTC/USD would not be able to establish support levels above $9,000, the token experienced a trading surge that sent it past the $11,000 mark on three occasions over a 48-hour period. The formerly elusive $10,000 support level seems more likely than ever, and one prominent analyst has explained why he believes Bitcoin could touch $15,000 over the next few weeks.
The Latest Trends in Bitcoin, and Federal Attention
As of August 5, BTC was hovering around $11,070 and $11,277, its first time doing so in more than 20 days, and trading volumes were as high as $3.9 billion over a 24-hour period. Traders who follow technical analysis noticed patterns that suggested new support lines of resistance forming around $11,000 as the new trading week began, but it should be noted that this surge, which started on a Friday, began with fundamental news developments coming from the United States.
On August 3, U.S. President Donald Trump announced his decision to impose a new set of tariffs on Chinese imports starting in September. As can be expected, Wall Street reacted with a massive sell-off, but there were additional concerns about economic developments announced a few days earlier. The Federal Reserve decided to lower interest rates slightly; while this move was welcomed by Wall Street, Chairman Jerome Powell warned that future interest rate cuts were unlikely to happen this year. This last statement, combined with Trump's import tariffs and the prospect of a global recession, steered institutional traders towards flight-to-safety investments, which these days include Bitcoin.
What Federal Reserve Governors are noticing is a deceleration of the American economy, but they do not want to rush into drastic rate reductions or major stimulus plans; nonetheless, the global trade war between China and the U.S. cannot be ignored. Investors are reacting to these developments as they always do: by shifting their cash towards bonds, gold, Bitcoin, and other instruments that are not directly linked to major stock exchanges. This trend explains BTC/USD going over $11,000, and it supports the idea of $15,000 in August as stated by Max Keiser, a former Wall Street analyst who is now dedicated to cryptocurrency trading. Keiser thinks that reports coming from central banks are being interpreted by investors as opportunities to continue placing their money on assets other than equity securities, hence fueling the ongoing Bitcoin rally.