Bitcoin lost 5% this week, but analysts see positive signs

Bitcoin Positive Signs

Three factors that could boost cryptocurrency in the month of September: inflationary pressures, discrediting fiat currencies, and the recent departure of the United States from Afghanistan are driving the acquisition of cryptocurrencies.

The Bitcoin listed in values close to $47.000 and accumulates a low of 1.41% in the last 24 hours. For the week, the cryptocurrency is down -4.93% and fails to overcome the barrier of evading the $50,000 bullish continuation that had reached the previous week.

The market had shown a positive reaction to comments from the chairman of the Federal Reserve on reducing asset purchases, as well as comments on inflation. However, that bounce didn’t last long. Meanwhile, looking at buying and sell levels on major exchange Binance revealed a support line that is slowly building around $48,800, forming a close stand-off or tie with sellers just below $50,000.

Despite this, there is a good outlook for cryptocurrencies in the month of September. Analyst Andy Hecht listed a number of factors that will consolidate momentum:

The market capitalization of the cryptocurrency asset class was back above the $2 trillion levels at the end of last week, so the bulls are back in control. There are three factors that continue to favor the rise of bitcoin, Ethereum and many others of the more than 11,460 digital currencies in this asset class.

  • Inflationary pressures continue to mount due to the Fed’s monetary policy and US government fiscal stimulus. Although the central bank begins to reduce its quantitative expansion program, the government is about to approve trillions in infrastructure and other spending initiatives. The rise in prices of all asset classes is bullish for cryptocurrency values.
  • The faith and credit given to fiat currencies continues to erode. Cryptocurrencies embrace a libertarian ideology that shifts control of the money supply from the government to individuals. As faith and credit in the dollar, euro, and other reserve currencies wane, cryptocurrencies become an alternative.
  • America’s withdrawal from Afghanistan has been nothing short of a disaster. In this difficult context, cryptocurrencies transcend borders and have become the capital flight instruments par excellence.

Those who fear political changes and outbreaks of violence in their countries are likely looking to cryptocurrencies for a way to protect and transport their wealth in times of turmoil.

The analyst believes that: “Bitcoin, Ethereum and the cryptocurrency asset class will record highs in late 2021. However, there are risks in this highly volatile asset class.”

At a cybersecurity summit of US tech companies and financial institutions held at the White House on Aug. 25, assistant CEOs called on the president to crack down on cryptocurrencies.

Meanwhile, the role of digital currencies as flight capital in a dangerous world could outweigh any effort to control the global cryptocurrency asset class. “I think that capital flight is now one of the most compelling reasons for people around the world to keep at least some of their wealth in the form of digital currencies,” concluded Hecht.