Bitcoin welcomes a good start in July, and analysts optimistically predict that it is “inevitable” for it to reach $40,000.

Bitcoin's promising start in July has analysts predicting an inevitable rise to $40,000.

He said, “Bitcoin has exceeded the high point in April, while the altcoin market is 20% lower than the level in April and 70% lower than the high point in 2021. Bitcoin does not need to worry about regulatory issues. Its resilience and influence make it unique at the beginning of a new month and quarter.”

Antoni Trenchev added, “If the SEC does not take the time to approve one of the BTC spot ETFs, it will undoubtedly have a significant impact on the crypto market.”

Cryptocurrency technical analyst Michael Nauss pointed out that since the historical high point in 2021, the monthly closing price of BTC/USD has for the first time been above the adjusted volume-weighted average price (AVWAP).

AVWAP examines important support and resistance levels based on trader behavior. The June closing price breaking through $30,000 marks a recovery unseen in two years.

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Caleb Franzen, CEO of Cubic Analytics, retweeted Nauss’s tweet, calling on market observers to extend their time preferences. He pointed out, “When BlackRock ETF announced its application, Bitcoin was priced at about $26,000 and rose to a new high of more than $31,000 since the beginning of the year. Is the current trading price still above $30,000 because people have lost their minds? No, I predict there will be higher highs and higher lows.”

Bitcoin’s resilience can withstand macro headwinds

Uncertain macroeconomic and inflationary conditions, coupled with the seemingly hawkish stance of the Fed, may create short-term resistance.

The US government bond yield adjusted for inflation is rising, which has led some observers to worry about potential risk aversion in stocks and broader financial markets. However, cryptocurrency analysts expect Bitcoin and digital assets to remain resilient overall.

According to data tracked by TradingView, the real yield on 5-year government bonds rose to nearly 2% last week, breaking the September 2022 high of 1.92% and reaching the highest level since the end of 2008. The yield on 10-year government bonds is 1.6%, which is very close to the data in 2009. At the same time, the real yield on 2-year government bonds has reached 3%, the highest level in at least ten years.

Increased US bond yields may suppress economic growth and reduce the attractiveness of risky assets such as Bitcoin and gold. Bitcoin and the tech-heavy Nasdaq index on Wall Street have always moved in the opposite direction to US bond yields.

Richard Usher, head of over-the-counter trading at crypto bank BCB Group, believes the recent surge in US bond yields is a problem for stocks, not digital assets.

Most macro traders sensitive to changes in US bond yields left the cryptocurrency market during last year’s crash, leaving “long-term holders” in control of the market. “The US bond yield is now a real alternative to the stock risk market. The question is which type of investor is attracted to this return, typical investors in cryptocurrencies or tech stocks are seeking higher potential returns, or are making long-term investments in the industry or asset class. Therefore, I think the rise in US bond yields is more worrying for blue-chip stocks than for markets such as technology or cryptocurrencies, and it won’t disrupt the mid-term growth narrative,” Usher wrote in his article.

Ben Lilly, a cryptocurrency researcher at Jarvis Labs, told Coindesk that in the long run, increasing costs could actually bring more capital to production sectors such as blockchain. “This just shows the normal trend of capital costs. When traditional markets become rough, many people tend to focus on the crypto industry and see crypto as a way to increase productivity. I expect this will bring more funds to innovative areas such as smart contracts, programmable currencies and DeFi, which are expected to increase productivity,” Lilly said.

Author: BlockingBitpushNews Mary Liu

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