12.11.202109:44 Forex Analysis & Reviews: Bitcoin rises due to inflationary pressures

After yesterday's correction in equity markets, which pulled the cryptocurrency market down, bitcoin is slowly regaining its footing. Large buyers from the $63,000 level immediately got involved.

Many attribute bitcoin's growth to high inflation expectations in the future. However, some suggest paying attention to stagflation. Deutsche Bank believes that there has been a profound paradigm shift in the global economy. The risk that inflation will persistently exceed official targets has now caused greater concern than before. All of this affects corporate and household decisions about their spending and saving. The bank's latest report also highlights the risk of stagflation. Despite strong wage growth, inflationary pressures will still be higher. This would negatively affect economic growth prospects and lead to a sharp contraction in consumer demand.

Against a backdrop of high inflation, many people are looking for alternative safe-haven assets, to which the US dollar no longer belongs. Gold no longer attracts many people either. However, high-tech bitcoin has become a better option. Many experts believe that the growth of the cryptocurrency will continue until the end of the year because of the stimulus programs of the developed countries' authorities. They expect bitcoin itself to renew the level of $100,000.

Percent Balance on Exchanges

The outflow of bitcoins from exchanges also indicates the likely possibility of such a situation. Bitcoin supply on exchanges remains at its lows. This indicates that investors do not want to trade or speculate on exchanges. This is further proof that bitcoin is an instrument of savings and accumulation.

According to the latest Glassnode data, the Bitcoin: Percent Balance on Exchanges - All Exchanges indicator has settled at its lows and there is no active movement since November 4. The small inflows to the exchanges have been floating lately. It is not yet clear whether the market has reached its peaks and whether traders intend to take profits. Even yesterday's drop in bitcoin from highs of 68,800 to 63,000 didn't have much effect on the figure.

As for the technical picture of bitcoin, the bulls have defended support at $63,000, positioned just below. This keeps good upside potential for the first cryptocurrency. However, before breaking out to new highs, BTC buyers need to deal with $65,800 resistance, which just recently served as good support. A move above $65,800 would quickly take the exchange rate back to the highs around $68,800 and lead to a renewal. If the pressure on the trading instrument intensifies, a retest of $63,000 would surely lead to a larger sell-off of BTC to the $58,000 and $54,444 range.

It should be mentioned that Muslims are not allowed to use cryptocurrency. This was announced yesterday by Indonesia's Council of Religious Leaders. Cryptocurrency was banned due to uncertainty and risk, the report said. National Ulema Council head Asrorun Niam Sholeh says that cryptocurrency can be sold as a commodity if it complies with Sharia law and demonstrates a recognized benefit. As a reminder, earlier this year Indonesian authorities said they planned to tax profits from cryptocurrency trading to boost revenues during the COVID-19 pandemic. In 2018, the country's central bank declared cryptocurrency an illegal means of payment. According to Indonesia's commodity futures trading regulator Bappebti, there were around 4.45 million crypto investors registered in the country as of May this year.