Bitcoin has been experiencing a significant decline in price over the past month. However, according to a Wolfe Research analyst, the cryptocurrency could potentially see further weakness in the near future before it starts to recover.
Rob Ginsberg, the analyst, believes that although Bitcoin will eventually break out to the upside and reach higher prices, it will first need to go lower. This trend of declining before an eventual breakout has been observed in the past.
Ginsberg also pointed out some potential headwinds that could further weigh on Bitcoin. The minutes of the U.S. Federal Reserve’s July meeting revealed a possibility of future interest rate hikes, which could negatively impact the cryptocurrency. Additionally, the strengthening of the U.S. dollar poses another challenge for Bitcoin.
These near-term challenges, according to Ginsberg, are likely to force the price of Bitcoin lower and keep trading volume subdued. However, he also mentioned that when a price expansion does occur, it is expected to be abrupt.
The analyst highlighted the $31,000 level as an important resistance to watch. Bitcoin has been rejected from this level multiple times this year, indicating its significance in the market.
It is important to note that the article does not mention the original author of the information provided. Nevertheless, the analysis from the Wolfe Research analyst suggests that although Bitcoin may experience further decline in the short term, a potential breakout and higher prices could be expected in the future.