Bitcoin's (BTC) value edges towards historical peak in anticipation of July CPI statistics disclosure
In a significant development, Bitcoin's price has climbed by 3.6% in the past 24 hours, reaching an impressive figure above $122,000. This upward movement has formed a strong green candle on the charts, and the cryptocurrency is now approaching its previous all-time high of $123,000.
Analyst Ali Martinez has noted this as the highest level of daily new Bitcoin addresses in a year, with 364,126 new addresses created daily. Crypto analyst Benjamin Cowen suggests that Bitcoin will close August in positive territory, while Sean Dawson, head of research at on-chain options platform Dervie, expects Bitcoin to reach "$150,000 before the end of the year".
The next two weeks are crucial for Bitcoin as key economic data and policy decisions unfold. Market participants are watching for signals about potential Federal Reserve rate cuts. According to Polymarket data, two rate cuts totaling 50 basis points are considered most likely at 40% probability for September's FOMC meeting. A softer-than-expected inflation print could strengthen expectations for a Fed rate cut as early as September.
The increase in inflation is partly attributed to the effect of Trump tariffs. Economists expect the annual inflation rate to increase slightly to 2.8%. The likelihood of three rate cuts totaling 75 basis points has increased from 8% to over 23% in the past week.
Derivatives data shows increasing open interest with a rise of 7,834 BTC alongside higher spot and perpetual buying volumes. Bitcoin ETFs have pulled in $91.6 million, ending a four-day streak of outflows.
Historical patterns from previous halving cycles suggest that Bitcoin undergoes an accumulation and moderate growth phase several months after the halving event, followed by strong bullish momentum into the latter part of the year, often culminating in new all-time highs near or past the end of the calendar year. This is based on the supply reduction driving scarcity and price appreciation.
In 2021 specifically, Bitcoin experienced a major price increase starting mid-year, rallying from around $30,000 in July to over $60,000 by April with some significant pullbacks due to profit taking and regulatory concerns. Technical patterns such as Fibonacci extensions and the Wyckoff method identified phases of accumulation and strength that preceded bullish breakouts, often indicating targets 1.5 to 2 times the previous resistance levels.
Given these trends, analysts projected that the latter half of 2021, particularly Q4, would see Bitcoin challenging or surpassing prior high levels, potentially reaching toward $70,000–$80,000 in optimistic scenarios consistent with post-halving bullish cycles, given the increasing institutional adoption and ETF inflows.
For August 2021, Bitcoin was expected to consolidate support in the $40,000–$45,000 range with occasional volatility influenced by market sentiment and macroeconomic factors. However, the recent surge has pushed the price above this range, indicating a potential shift in the market dynamics.
In conclusion, the current bullish sentiment for Bitcoin in August and Q4 2021 reflects a potential for further gains but also volatility, considering typical post-halving cycle dynamics and technical indicators. Investors should remain vigilant and keep an eye on key economic data and policy decisions that could impact Bitcoin's price movement.
Investors should consider the impact of potential Federal Reserve rate cuts on Bitcoin's price, as a softer-than-expected inflation print could strengthen expectations for a Fed rate cut as early as September.
Given the anticipated bullish momentum in Q4 2021 and the increasing institutional adoption, investing in Bitcoin could potentially yield significant returns as Analysts predict Bitcoin reaching towards $150,000 before the end of the year.
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