MAGA (TRUMP), the leading Donald Trump-themed crypto by market cap, has wiped out all of its gains since the attempted assassination of the former US President on July 13. Despite the setback, there is still significant technical upside potential, especially since Trump is scheduled to hold a fundraiser at a Bitcoin conference in Nashville on July 27.
MAGA Price, ‘Trump Pump’ in the Spotlight in July
On July 19, MAGA fell 7.20% to $6.21, which was almost the same price as the rally a week ago before Trump’s shooting. A decline to pre-rally levels could suggest that the market’s reaction to the event was temporary and speculative, rather than a fundamental change.
However, MAGA’s recent pump and dump appears to be part of an inverse head and shoulders (IH&S) pattern. This technical setup is characterized by the formation of three lows, with the middle one (the head) deeper than the other two (the shoulders) and above a common neckline resistance.
As of July 19, Mimecoin has formed the right shoulder of the pattern and is looking to bounce towards the neckline resistance at around $9.50. Typically, the IH&S pattern is resolved when the price breaks through the resistance line and rises the maximum distance between the head and neckline.
Therefore, MAGA is likely to target the $9.50 neckline resistance level first, which will be reached by the end of July when President Trump is scheduled to attend Bitcoin 2024, one of the largest cryptocurrency conferences in the US.
This event increases the likelihood of a MAGA inverse head and shoulders (IH&S) breakout, setting the stage for a further surge towards $20.30 ahead of the US election in November. This therefore means a 200% upside potential from current levels.
Conversely, a break below the shoulder low of $6.38 would invalidate the overall bullish setup and risk MAGA price falling to a local low target of around $4.50, a 15% drop from current prices.
MAGA Outlook Improves as September Rate Cut Prospects
MAGA’s bullish outlook provides additional clues as bets grow that rates will be cut in September.
The Fed’s preferred inflation measure has eased to 2.6%, and the previously overheated labor market has cooled to pre-pandemic levels. Fed officials describe the labor market as still strong, but acknowledge a potential turning point marked by a steady decline in vacancies and a gradual rise in the unemployment rate.
“I believe we are approaching a point where we need to start lowering the policy rate,” Federal Reserve Chairman Christopher Waller said on July 17. He described the labor market as being in a “sweet spot,” but stressed the need for the Fed to maintain that balance.
“The risk of rising unemployment is greater than we have seen in a long time,” Waller added.
Low interest rates can increase investors’ appetite for higher risk investments, driving up demand and prices for speculative assets like MAGA, similar to what happened with Dogecoin’s explosive rally during the near-0% interest rates of 2020-2021.
This article does not contain any investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making decisions.