Bitcoin: New target $40,000 says analyst, huge company to buy more BTC

  • MicroStrategy is preparing for another $500-million fundraise to invest in Bitcoin turning the market sentiment bullish.
  • The U.S. CPI inflation and the Merge event will be the key events to watch this week as we can expect some market volatility.

The world’s largest cryptocurrency Bitcoin (BTC) made strong gains over the last weekend moving closer to $22,000. As of press time, BTC is trading at $21,753 with a market cap of $416 billion.

The Bitcoin price gained as the U.S. equity market remained positive last Friday. However, some analysts believe that Bitcoin could be heading to $40,000 if it continues this momentum going ahead. Jared Blikre, senior analyst at Popular Finance wrote: “BTC forming pretty big base at ~$20k, with $30k and $40k big upside targets. Tons of 2021 price memory from $30k to $60k. Momentum is key”.

Bitcoin’s recent move to the north has given hope to investors of a fresh move upside. $20,000 remains crucial support on the downside. Although the BTC price took a dive under it last week, it didn’t stay there for long.

Another reason behind Bitcoin’s bullish move is its biggest corporate holder Microstrategy is raising more funds to make fresh purchases. Last Friday, MicroStrategy filed for a $500-million worth of stock sale. The company said that it shall be using these funds to make fresh purchases and add more Bitcoins to its holdings.

As per the filing, the company shall be selling its Class A MSTR shares. However, there’s no specific date for the potential sale announced yet. MicroStrategy said that it intends to retain all future earnings and purchase additional Bitcoins from it.

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As of date, MicroStrategy holds a total of 129,699 Bitcoins worth a total of $4 billion and an average price of $30,666 per coin.

Two big events ahead this week

Bitcoin and crypto investors shall be keenly watching two major events ahead this week. On Tuesday, September 11, the United States will unveil its CPI inflation numbers. As a result, we have seen the Bitcoin pump cooling down on Sunday.

Higher-than-expected inflation will nudge the Fed to take further restrictive monetary measures. The Fed is also set to announce interest rate hikes ahead this month. As per market expectation, the Fed shall be announcing a 75 basis points rate hike. However, if the CPI reading remains concerning the Fed could consider an even aggressive rate hike of 100 basis points.

Tony Sycamore, senior market analyst for City Index Ltd. said: “The market knows that it’s got a break from this unrelenting hawkish Fedspeak for a couple of weeks and that the pace of central bank rate hikes is likely to slow”.

Another major event ahead this week is the much-awaited Ethereum Merge. Any hiccups in this Merge could put selling pressure on ETH and the crypto market as well. So far, all developments with the Merge have been on time.

About Author

Bhushan is a FinTech enthusiast and holds a good flair for understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In his free time, he reads thriller fictions novels and sometimes explores his culinary skills.

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