Bitcoin Breakout Could Be Around the Corner as Asset Is No Longer Oversold: Fairlead Strategies’ Katie Stockton
Bitcoin is no longer oversold, according to Fairlead Strategies' Katie Stockton. The asset cleared its 200-day moving average back in May, indicating a potential breakout could be coming. Bitcoin has rallied recently, with its price up over 22% in a seven-day period.
Intelligence analysis by Llama
Bitcoin's recent rally has some analysts saying that the so-called debasement trade could be hot again. The debasement trade is when investors buy assets when they think fiat money is losing value.
Imagine you have a big jar of cookies, and you think the cookie jar is going to run out of cookies soon. You might start eating the cookies faster, right? That's kind of like what's happening with Bitcoin. Some people think that the money in the world is going to lose value, so they're buying Bitcoin as a way to protect their money. It's like having a special cookie that's hard to make and can't be printed out of thin air.
Analysis
Bitcoin Breakout Potential
Bitcoin's recent rally has some analysts saying that the so-called debasement trade could be hot again. The debasement trade is when investors buy assets when they think fiat money is losing value. Bitcoiners have long argued that the biggest cryptocurrency can work as a hedge against government printing, along with precious metals.
According to Fairlead Strategies' Katie Stockton, Bitcoin is no longer oversold. The asset cleared its 200-day moving average back in May, indicating a potential breakout could be coming. Stockton told CNBC that "it's not overbought yet, so that's the good thing." Whenever you see a breakout above a resistance level, it's always better to have that immediate follow-through to essentially confirm the breakout.
Bitcoin was trading under $65,000 for most of June and July and experiencing its lowest volatility in its 17-year history. Its recent rally has some analysts saying that the so-called debasement trade could be hot again. The debasement trade is when investors buy assets when they think fiat money is losing value. And losing value it is: The dollar slid following the Treasury's announcement last week. Gold and bitcoin have since rallied.
Bitcoiners have long argued that the biggest cryptocurrency can work as a hedge against government printing, along with precious metals. U.S. investors last week piled back into Bitcoin exchange-traded funds; the investment vehicles had their best week since October, with nearly $2 billion in inflows. Bitcoin's price was also helped after President Trump last week gathered with crypto executives at the White House and said that getting the Clarity Act over the line would keep the U.S. ahead of China. Lawmakers were hoping to get a vote on the crypto market structure bill, or Clarity Act, in August. A vote will now go ahead in September. The bill will establish a framework for distinguishing between digital assets that are securities, commodities or payment stablecoins.
Key points
- Bitcoin is no longer oversold, according to Fairlead Strategies' Katie Stockton.
- The asset cleared its 200-day moving average back in May, indicating a potential breakout could be coming.
- Bitcoin's recent rally has been driven by a combination of factors, including the Treasury's announcement and President Trump's comments on the Clarity Act.
- The debasement trade is when investors buy assets when they think fiat money is losing value.
- Bitcoiners have long argued that the biggest cryptocurrency can work as a hedge against government printing, along with precious metals.
If this development plays out positively, Bitcoin's price could continue to rise as more investors buy into the asset. The recent rally has been driven by a combination of factors, including the Treasury's announcement and President Trump's comments on the Clarity Act. If these factors continue to support Bitcoin's price, we could see even more upside in the coming weeks.
However, there are also risks associated with Bitcoin's recent rally. If the Treasury's announcement is seen as a negative development, it could lead to a sell-off in Bitcoin's price. Additionally, if President Trump's comments on the Clarity Act are seen as a negative development, it could also lead to a sell-off in Bitcoin's price. Furthermore, if the dollar continues to slide, it could lead to a decrease in demand for Bitcoin as a hedge against government printing.
