Bitcoin and gold could be on track to a significant price breakout as macroeconomic conditions improve.
The beginning of “macro summer” could lead to a Bitcoin (BTC) price breakout in the near term, according to Raoul Pal, the founder and CEO of Global Macro Investor, who wrote in a July 29 X thread:
“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.”
The “Banana Zone” is a term coined by Pal to describe a period of significant upward price movement. In this case, it suggests that Bitcoin price could break out to a new all-time high.
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Bitcoin needs a close above $70,000 to confirm the breakout
According to Pal, Bitcoin will confirm a move toward a new record high when it breaks out of the current cup and handle formation, a technical chart pattern used to spot bullish uptrend continuations.
This confirmation will come once Bitcoin price breaches the $70,000 mark, according to crypto trader Moataz Elsayed, also known as “Eljaboom.” The trader wrote in a July 28 X post:
“BTC Massive Cup And Handle [formation]. A weekly close above $70,000 and the game will be over for bears!”
Contributing to the bullish sentiment, Bitcoin’s open interest reached a new all-time high on July 29, pointing to increased interest and liquidity in the world’s first cryptocurrency that could result in a breakout.
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Bitcoin price catalysts: Nasdaq correction, US elections and weakening US dollar
Three notable catalysts support Bitcoin’s imminent price breakout, and the first is the Nasdaq’s correction.
The Nasdaq (NDX) is on track to perform its “healthy correction,” according to Pal, who shared the below chart.
The second catalyst could be the upcoming US elections, as election years have historically been bullish for the stock market and Bitcoin prices.
Lastly, a potential decrease in the value of the US dollar could catalyze Bitcoin’s rally to a new all-time high, according to Pal, who wrote:
“The final thing that would ease financial condition further would be a weaker dollar, which I think is likely.”
During periods of fiat currency devaluation, investors often turn to safe-have assets like Bitcoin and gold to protect their purchasing power.
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