Happy Sunday, traders. It’s Matt here.
Every day feels like we’re getting closer to a bottom. But are we really there yet or are we in another head fake before another leg down?
Thanks to strong retail sales data, stock indexes got a good bounce on Friday. On the same day, Bitcoin (BTC) tested resistance at a key level I’m watching a couple of times.
If it breaks this level, we could finally get that bounce that I’m watching for…
However, there’s an even bigger catalyst that can make BTC take off — a global event that’s currently shaping up in crypto’s favor.
The News That Could Boost Crypto’s Popularity
First, a quick update on the BTC … overall, markets are stabilizing, but I’m still not ruling out a drop to $15,000. It’s really gonna depend on the news in the near term.
BTC tends to follow the Nasdaq index more closely than the other stock indexes and, so far, the Nasdaq is holding up its key support levels around 11,000 (from the summer of 2020) really well.
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So, we’re trending sideways. BTC recently saw a nice triple bottom at around $19,000. I see that as a bullish sign but I’m still cautiously optimistic. It’s still trading in a range.
The upper level of BTC’s range is $21,000 — a price it tested a few times on Friday when the stock indexes bounced. For me, I need to see it break above $21,000 and hold it in order for me to open a trade.
So what’s the news catalyst that could help Bitcoin bounce? Inflation … specifically global inflation.
Parts of Africa and South America are seeing inflation reach over 200% and even 500%. Very scary numbers. It’s sad to think about citizens having to deal with that.
When countries are in such dire straights, they’re more likely to turn to alternatives to their fiat currencies.
It happened in El Salvador and, more recently, in the Central African Republic. Keep your eyes peeled for further headlines of more countries doing the same.
If enough countries have to turn to Bitcoin to rescue their economies, it could definitely impact crypto price action in a positive way.
Conclusion
The best traders know that holding onto your money is equally as important as making it. That’s why they practice building their accounts with patience.
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