(Kitco News) – Cryptocurrency prices consolidated in early trading on Monday following the surprise announcement from President Joe Biden over the weekend that he has withdrawn from the 2024 Presidential election, making way for Vice President Kamala Harris to become the front-runner for the Democratic ticket.
Data provided by TradingView shows that Bitcoin (BTC) experienced volatility in the wake of Biden’s announcement, at one point flash-crashing to $65,828 before reversing course to hit a high of $68,500 several hours later.
BTC/USD Chart by TradingView
Bitcoin has since trended lower amid a rise in the dollar index (DXY), which bounced back from a decline to 104.181 following Biden’s announcement to hit 104.418 shortly after 11 am EDT on Monday, putting pressure on cryptos, gold, silver, and oil.
“The dollar weakened slightly against most major currencies in the immediate aftermath of Joe Biden’s announcement on Sunday that he would not stand for re-election in November,” said Neil Roarty, an analyst at Stocklytics. “It eased around 0.1 percent versus the euro and a similar amount against sterling.
“At face value, a weakening dollar might suggest traders would have favoured the relative stability of a second Biden term in the White House,” he added. “But Donald Trump was already a clear front-runner, ever since Biden’s disastrous debate performance last month.”
“The greenback has surged in value over the last couple of years, particularly as the Fed raised interest rates,” Roarty said. “Trump has previously said that he prefers a weaker dollar to help domestic manufacturers sell abroad. With Trump holding a commanding lead across most polls and prediction markets, this first downwards tick might just be the beginning of a greater trend.”
The pause and consolidation for Bitcoin near support at $67,000 are not unexpected as the top crypto has rallied more than 25% since its July 5 low near $53,500, and it's common for sideways price action to follow such a move as bulls regroup before preparing to push higher.
“The cryptocurrency market is near 6-week highs, with capitalisation near $2.44 trillion, adding 0.5% in the last 24 hours,” said Alex Kuptsikevich, senior market analyst at FxPro. “A wait-and-see attitude and some profit-taking replaced active buying in the last three days starting Friday. Judging by the dynamics, the market prefers to stand still, waiting for new signals, which may be statements from politicians or important economic data scheduled for the second half of the week.”
“Bitcoin is trading near $67.2K, losing 0.7% since the beginning of the day,” he added. “Growth has lost traction near the upper boundary of the descending channel resistance. Here, the first cryptocurrency may linger for a few days, staying within the pattern of the last five months.”
Kuptsikevich noted that on Friday, “the 50-day moving average served as an important support and launching pad for the latest growth momentum. Bitcoin will need to overcome $71K to confirm the break of the downward consolidation, which we believe will be in the next few days. Also, there may be a new attempt to drag down the price back below the 50-day MA (now near $63.7K) during this retreat.”
Investors who followed Nathan Rothschild’s advice to ‘buy when there is blood on the streets’ have thus far been rewarded, and according to John Glover, Chief Investment Officer of Ledn, they still have a chance at more upside as Bitcoin will likely rise to $85,000 before the end of 2024.
“Buying the dip to the mid-$50k region has clearly completed either Wave 4 (orange line) or wave iv of 3 (dotted yellow line),” Glover said in a note to Kitco Crypto. “The chart pattern is still not clear as to which path we’re on. In either case, the push to $85k before the end of 2024 is looking very likely, the price behavior once we hit that level will determine which path we’re on.”
“A significant correction from this level and we are likely on the dotted yellow path and en route to $115k+,” he added. “However, as always, the bull’s party can be spoiled if we see a break below $49k in the coming month or so. In my opinion a very unlikely scenario.”
At the time of writing, Bitcoin trades at $66,850, a decrease of 0.48% on the 24-hour chart.
