According to market analyst Benjamin Cowen, Bitcoin’s price may experience an extended consolidation phase lasting up to nine months. Cowen had earlier predicted that BTC could consolidate in the short term after he described the crypto as having reached a mid-cycle top earlier this year.
He first shared this analysis back in April and said that Bitcoin would go through 6 to 9 months of consolidation. This is a time-based pattern that is similar to previous cycles.
As the six-month minimum has now been reached, Cowen further argues that external factors, possibly a labor market shock, could prompt further falls in prices. This could take Bitcoin price to the 100-week Simple Moving Average (SMA), thus extending the consolidation period to 2025.
– Advertisement –
Macro Trends Impacting Bitcoin
The global economy has been a major driver of Bitcoin in the past few months. The latest US payroll data indicated that 254,000 new jobs were created in September, more than the market forecast and enhancing the position of the US dollar.
Up to now, Bitcoin has been seen to have an inversely proportional relationship with the US dollar; therefore, when the dollar is strong, the price of Bitcoin goes down. Nevertheless, the existing market environment seems to diverge from this trend.
The “Milkshake Theory” could be another reason for this trend, which affirms that higher US interest rates and better economic performance lure foreign capital, therefore boosting the dollar. At the same time, concerns over the economic slowdown, especially in Japan, have led to the anticipation of further economic expansion measures.
El Salvador Moves Forward with Bitcoin Regulation
Despite these tensions, El Salvador is not backing down on the implementation of Bitcoin, even with the pushback from the International Monetary Fund (IMF). In a statement, Juan Carlos Reyes, President of the National Commission on Digital Assets (CNAD), said that legislators had approved changes to the CNAD law.
These changes empower the commission to oversee the operations of the Bitcoin companies in the country. The CNAD will now regulate the Bitcoin ecosystem of El Salvador and will regulate companies while implementing a risk-based regulatory system.
In the opinion of Reyes, this move places El Salvador on a path to be the world’s leading nation in digital asset regulation. The team would consist of individuals with a knowledge of regulations plus individuals familiar with Bitcoin.
Even with the IMF’s warnings, El Salvador seems set on continuing with its Bitcoin plan. Julie Kozack, head of the IMF Communications Department, again stressed that the IMF told El Salvador to avoid overexposure to Bitcoin and increase regulation of this activity.
However, there are people in the crypto industry who have urged the country to ignore such worries.
Mixed Market Signals Amid Global Macroeconomic Events
Amid these tensions, Bitcoin’s price has recovered after establishing support at the 24-hour low of $60,803. During the bull rally, the BTC price shot up to a high of $62,465, where resistance was stiff.
Despite this, BTC’s price as of press time was positive, exchanging hands at $62,060, a 2% surge from the support level.
BTC/USD price chart (source: TradingView)
On the BTCUSD price chart, the Moving Average Convergence Divergence (MACD) has shifted above its signal line indicating a building of bullish momentum.
Moreover, with the histogram in the positive region, buying pressure is increasing. This move is a precursor to a bull rally. In addition, the Chaikin Money Flow (CMF) is in the positive region, with a rating of 0.23 backing the increasing buying pressure.
