The Bitcoin price has risen by 2.5% in the past 24 hours, with its move to $27,896 helping the cryptocurrency market overall to gain by 2% in the same space of time.
BTC is now up by 4% in a week but down by 5% in the last 30 days, although its gain today means it has risen above its 21 weekly EMA (exponential moving average), suggesting that more increases are in store.
Its rise also signals potential rallies for lower cap altcoins and meme tokens, given that such cryptocurrencies tend to follow Bitcoin’s lead.
And with Republican lawmakers agreeing a deal with the White House on the US’ debt ceiling over the weekend, it’s entirely possible that further gains will follow in the coming days, particularly when the US Congress ratifies the deal.
Bitcoin Price Bounces From 21 Weekly EMA – Risk on For Low Market Cap Tokens & Meme Coins?
Bitcoin’s chart is encouraging, in that it signals a breakout that could continue in the near future.
The cryptocurrency’s relative strength index (purple) reached 80 over the weekend, and while it has subsided a little in the past 24 hours it remains close 70, raising the possibility of more joy to come.
Likewise, BTC’s 30-day moving average (yellow) has risen strongly above its longer term 200-day average (blue), as has its actual price.
This also suggests that Bitcoin’s momentum is on the up right now, with the coin’s price likely to move up to $28,000 in the next few days.
As noted above, it will certainly rally again once the US Congress approves a deal on the federal government’s debt ceiling, which was agreed on Sunday between President Joe Biden and Republican House Speaker Kevin McCarthy.
The ominous possibility of a damaging debt default had been hanging over the cryptocurrency market (and financial markets in general) for a couple of weeks, serving to keep prices supressed.
However, with this risk now almost neutralized, the market will be free to continue the gradual recovery it began at the start of the year, with BTC alone up by 68% since January 1.
Indeed, other recent signs suggest that the global economy continues to steadily (if unspectacularly) improve, with the Eurozone avoiding a recession in Q1 2023.
On top of this, the IMF has contradicted earlier, gloomier forecasts and predicted that the UK will avoid a recession this year, while the US economy has been adding jobs and beating earnings predictions.
It’s also worth mentioning that Hong Kong is to introduce new regulations from June 1 that will permit retail investment in cryptocurrencies, marking a turnaround in Chinese policy towards crypto.
Risk-On?
Taken together, these pieces of news paint a positive picture, in which growing confidence in the global economy will increasingly translate to a growing appetite for risk-on assets such as cryptocurrencies.
Even now, the best-performing coins in the market today aren’t the big established cryptocurrencies, but a variety of newer altcoins.
This includes Injective (INJ), Lido (LDO), Quant (QNT) and Sui (SUI), which are up by 14%, 6.1%, 6% and 5% (respectively) in the past 24 hours.
What’s happened here is that Bitcoin’s gains today have helped to drive greater appetite for riskier altcoins, which can decline more heavily during selloffs but also gain more strongly during rebounds and rallies.
And assuming that BTC benefits from Congress approving the aforementioned deal, it’s highly likely that altcoins will rally as well, doing so perhaps more strongly than the original cryptocurrency.
This is likely to include meme tokens, which have been among the strongest performers in the past month or so.
Pepe (PEPE), for instance, has risen by around 350% in the last 30 days, while Wojak (WOJAK) is up by 9% today and by 100% in the past month.
Of course, meme tokens can easily pass in and out of fashion, meaning that the likes of PEPE, WOJAK and others could easily be overtaken soon enough by newer meme coins, such as Sponge (SPONGE) and Wall Street Memes (WSM).
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