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As September comes to an end, Bitcoin continues its consolidation scheme above $10,000, but what happens next?
This is the eighth consecutive week in which Bitcoin trades above $10,000, a style of consolidation that many analysts say can eventually make way for a bullish race later this year.
According to CoinMarketCap data, the value of Bitcoin appears to be consistently above the $10,000 mark, even though the token is quoted at a decrease in value today ($10660) which a week ago ($10930). Earlier this week, the value fell as low as $10220.
This is consistent with the value trend for the September maximum, which has remained in diversity from $10,000 to $11,000 since Friday, September 4.
The lack of primary volatility in the value of Bitcoin in recent weeks can basically gain advantages for institutional investors who have access to microsterephategy tools, while retail investors, who have a tendency to buy and sell on higher value occasions, can remain in their currencies for now.
Jack Choros, cryptocurrency commentator and content manager for Crypto Radar, told Finance Magnates that “any consolidation is a thing for the next bullish race. “
“Bitcoin will succeed at almost $20,000 until the end of the year. Listen to me carefully. “
But is a bullish race feasible at this point? Maybe, but there’s a lot of points at stake.
This week, several analysts turn to the USD for clues about what Bitcoin could do next: “Since the black swan’s time of March 12, 2020, the value of bitcoin and the US Dollar Currency Index (DXY) are moving inversely. “proportionally to others,” commented Peter Goodrich, CPA and Tax Director of Prager Metis CPAArray at Finance Magnates.
Concrete example: for several weeks, “DXY has consolidated laterally, as has the value of bitcoin,” Goodrich said.
In recent days, however, “DXY has noticed an upward boost, which has had a negative effect on the value of bitcoin. “
In fact, over the more than five days, the DXY has made an upward movement of approximately 92. 89 to approximately 94. 30, and gave the impression that it was moving upwards at the time of publication.
However, while the dollar would possibly do so in the short term, the lingering effects of coronavirus and the forthcoming economic effects on the global economy may also continue to fall to the dollar in the long run.
Juan Aja Aguinaco, co-founder of Shyft Network, told Finance Magnates that “there are a number of investors who use BTC as a hedge against the fiduciary currency such as the USD, and as a hedge against volatility in the gold and valuable metals market. .
“Economic uncertainty has increased as the pandemic continues to aggravate the global economic crisis,” Peter Goodrich told Finance Magnates. “Governments have used an economic policy of quantitative easing to mitigate the effects of the global economic crisis. “
Bitcoin may take advantage of a long-term fall in the dollar: “Bitcoin evolved in the wake of the currency crisis of 2008. The next major step for cryptocurrency is mandatory regulatory clarity that would bring the elegance of assets to the general public. “
This regulatory clarity may already be underway: last week, two regulatory advances took a position in the cryptocurrency industry in the European Union and the United States.
The value of Bitcoin seems to have a primary reaction to any of these developments, however, greater clarity of regulation in the cryptographic area can pave the way for further adoption of cryptography, i. e. for institutional investors.
“This unclear regulatory landscape has made things more difficult for giant establishments,” he said, something that has in the past prevented giant establishments from accessing cryptographic space.
At the same time, however, the role of giant monetary establishments may be only towards a global reduction.
This is all about trust: earlier this month, the BBC reported that documents involving around $ 2 trillion in transactions were leaked about how some of the world’s largest banks had allowed criminals to move dirty cash around the world. .
“The leak also showed that classic monetary establishments are complying with existing anti-money laundering measures,” he said. As a result, “challenging banks and other new financial technology companies, as well as blockchain companies, have an opportunity to showcase the global that they can do more and offer users better products and services. “
Even with the development of mistrust of giant monetary institutions, adopting the cryptocurrency will take time.
However, there are other points that can drive the adoption of cryptography around the world.
“Not to sound pessimistic, however, the rest of the year turns out to be the first part of 2020, perhaps more,” Juan Aja Aguinaco told Finance Magnates. “We have what appears to be a momentary wave of the COVID-19 pandemic affecting countries whose economies have been weakened by the effects of the first wave. “
Moreover, “one thing is the existing political and social disorders affecting the United States,” he said. Aguianco. Traditionally, “American elections are a source of volatility in the classic and cryptographic markets. “
However, this election cycle could even be vital to the global economy: the drama surrounding the 2020 U. S. presidential election has also given way to “a wave of civil unrest in the United States, which can also succeed at its turning point and then the next election. “Other countries around the world are also experiencing civil unrest and political replacements (e. g. Belarus, Mexico and Bolivia). “
“They all have a significant effect on classic money markets,” he said. As such, “investors can start looking for higher yields in non-classical markets, such as cryptocurrencies, and DeFi to be more accurate. “
However, September turned out to have brought the DeFi area to a recharge time. Of 42 DeFi assets indexed in Messari cryptographic value knowledge, only five have experienced positive value movements in the last 30 days: Yearn. Finance, Uniswap, UMA, Cream and Loopring.
Jack Choros of CryptoRadar commented that while DeFi “cools down a bit,” projects like Yearn come at a genuine cost because the token value is tied to the amount of budget blocked by investors.
In other words, the value of some of those tokens is based on speculation: “the value of the currency is connected to the genuine value,” he said. “This is a smart sign for the foundations of the project.
“Some investors move capital between BTC and tokens of choice in search of higher returns,” he said. “This war between altcoins and Bitcoin is fundamental in their price. “
“In addition, a giant amount of capital has gone from BTC to DeFi tokens such as DAI, COMP, or parked BTC on WBTC for yield liquidity and agriculture groups, additional cut for capital and liquidity in the BTC market. “