Bitcoin and gold might be gearing up for a major price breakout as macroeconomic conditions show signs of improvement.
‘Macro Summer’ and Its Implications
Raoul Pal, founder and CEO of Global Macro Investor, suggests that we are entering a period known as “Macro Summer,” which could drive significant upward momentum for Bitcoin. In a July 29 post on X (formerly Twitter), Pal stated:
“Macro Summer is beginning to take hold and should last at least for the rest of 2024 and into 2025 […] Bitcoin is ready to soon break the giant cup and handle and head into the Banana Zone.”
Technical Analysis and Price Targets
Pal’s analysis points to a bullish technical setup for Bitcoin. The cryptocurrency is currently forming a “cup and handle” pattern on its price chart, a bullish technical formation that often precedes upward price trends.
| Formation | Description | Price Target |
|---|---|---|
| Cup and Handle | Bullish chart pattern indicating a potential breakout | Above $70,000 |
| Banana Zone | Predicted period of significant price increase | New all-time highs |
Crypto trader Moataz Elsayed, also known as “Eljaboom,” supports this view. In a July 28 post on X, he wrote:
“BTC Massive Cup And Handle [formation]. A weekly close above $70,000 and the game will be over for bears!”
According to Elsayed, Bitcoin will likely confirm a move toward new record highs if it closes above the $70,000 level.
Three main factors are contributing to the bullish outlook for Bitcoin:
- Nasdaq Correction: Pal predicts that the Nasdaq (NDX) is undergoing a “healthy correction,” which could positively influence Bitcoin’s price. The chart below illustrates this anticipated correction.
- US Elections: Historically, election years have been favorable for both stock markets and Bitcoin. As the 2024 US elections approach, this historical trend could play a role in boosting Bitcoin prices.
- US Dollar Devaluation: A potential decline in the value of the US dollar could further support Bitcoin’s rally. Pal commented:“The final thing that would ease financial condition further would be a weaker dollar, which I think is likely.”
Impact on Gold
Similar to Bitcoin, gold is also poised for a breakout in response to macroeconomic changes. As fiat currencies potentially weaken, investors often shift their focus to safe-haven assets like gold and Bitcoin to preserve their purchasing power.
| Asset | Expected Impact |
|---|---|
| Gold | Safe-haven asset, likely to benefit from fiat currency devaluation |
| Bitcoin | Potential breakout driven by macroeconomic factors and technical patterns |
The combination of a favorable macroeconomic environment, technical patterns, and potential catalysts such as the Nasdaq correction, upcoming US elections, and a weaker US dollar creates a compelling case for a Bitcoin and gold breakout. Investors are advised to stay informed and watch these developments closely.
Both Bitcoin and gold are set to capitalize on current macroeconomic trends, making them important assets to watch in the coming months.
Featured image credit: Sketchepedia via Freepik
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