Bitcoin Trades Around Its Weekly High Despite Elon Musk’s ‘Deflation’ Warning
Before Ethereum’s Merge upgrade, Bitcoin is trading at its weekly high. On the other hand, Tesla CEO Elon Musk also warned about the upcoming deflation due to the Federal Reserve interest rate hike. ARK Invest CEO Cathie Wood also holds a similar view.
Musk warns that a major increase in the Federal Reserve interest rate could trigger deflation in the economy. It means the consumer’s purchasing power will increase, whereas asset prices will decrease over time. Interestingly, Bitcoin, which aims to replace gold, is now trading at its weekly high. There is no sign of a Bitcoin downtrend for the short term, but after the Federal Reserve rate hike in the last week of September, the BTC price might fall again.
Cathie Wood also tweeted a similar view- ‘deflation in the pipeline’ because the commodity market is in a downtrend. The recent comment of two popular CEOs, Musk and Wood, backed by their logic of Federal Reserve interest rate hike, could influence the stock market and crypto in the next few weeks.
Experts also believe that it will affect more on BTC rather than other cryptocurrencies because Bitcoin still runs on a proof of work consensus, which is energy-intensive and unsuitable for long-term sustenance, especially after the Ethereum Merge.
Overall, there is a mixed sentiment in the market, and retail investors should consider the fundamentals before investing in cryptocurrencies for the long term. We think it is a time for short-term investment and not considering cryptocurrencies for the long term. Moreover, the Bitcoin price can touch $10K, which is more than 50% lower than the current market price. Please read our price analysis of BTC.
Bitcoin Price Analysis
At the time of writing this post, BTC/USD is trading around $22,300, but $20K is strong support. After forming candle sticks in the lower range of the Bollinger band for a few days, it has taken momentum, and it will continue by forming high highs and higher lows. We think it is an ideal time to invest for a short-term swing with a target price of $25K.
However, it may come down to the level of $20K for forming higher lows, and it will be a great opportunity to accumulate BTC in the short term, as per our Bitcoin prediction.
On the weekly chart, $25K will be resistance, and it may fall further to the level of $10K because it has been forming candle sticks in the lower range of the Bollinger Bands and RSI is below 40. We cannot say BTC is bullish for the long term, but it is a good time to trade with short-term targets. Please follow our website to get the latest update on Bitcoin.