As the trading week progresses, one of the most relevant events in the cryptocurrency market has been the recent recovery in Bitcoin. The price has started to show strength again amid the short-term loss of momentum in the U.S. dollar.
By : Julian Pineda CFA, CMT, Market Analyst
As the trading week progresses, one of the most relevant events in the cryptocurrency market has been the recent recovery in Bitcoin. The price has started to show strength again amid the short-term loss of momentum in the U.S. dollar.
Activity around BTC appears to have recovered and, for now, the asset is maintaining some buying pressure. If weakness in relevant substitute markets continues, this new bullish pressure could become more important over the next few sessions.
Click the website link below to Check Out Our FREE "How to Trade Gold" Guide
https://www.forex.com/en-us/whitepapers/
Demand returns to the market
The trading session has been relevant for financial markets in general, following the release of CPI inflation data in the United States. The market expected an average annual rate of 3.8%, but the official figure surprised to the downside and came in at 3.5%.
This slowdown in price pressures has created expectations of a less aggressive Federal Reserve. As a result, the 10-year U.S. Treasury yield has started to show weaker bullish momentum, falling below the 4.6% area. This loss of appeal in the bond market may have also affected one of Bitcoin’s most relevant substitute markets: the U.S. dollar.
This chain of events is important for Bitcoin price movements, as the dollar’s recent weakness may have opened room for a more consistent recovery in the cryptocurrency over the short term.
This relationship has remained in place over the last few months of trading. As the U.S. dollar has lost ground in recent sessions, Bitcoin has managed to regain strength. This is reflected in the behavior of the DXY index, which measures the dollar’s strength, and in the current correlation between both assets, which stands at -0.79.
This coefficient shows a relevant inverse relationship over the average of the last 50 sessions. However, it is important to remember that correlation can change over time.
Source: StoneX, TVC, Tradingview
In addition, the dollar’s weakness after the inflation data release has coincided with a new increase in Bitcoin activity. Looking at Open Interest, an indicator that measures the total number of open buy and sell positions across different exchanges, there has been an increase toward the 22 billion area.
This reflects a new inflow of positions into the market. Given that Bitcoin’s price has also appreciated, part of this move could be related to new buying positions. This recovery in demand coincides with the recent weakness of the U.S. dollar, suggesting that Bitcoin is starting to regain appeal as some substitute markets lose ground.
Source: CryptoQuant
Therefore, it is possible that the loss of strength in Bitcoin’s substitute markets is once again supporting the appeal of the crypto market. If this effect continues, demand activity could stabilize in the short term and allow BTC to maintain a more consistent recovery.
In that scenario, relevant buying pressure could remain part of Bitcoin price movements over the next few sessions.
Confidence begins to recover
Looking at the recent movements of the cryptocurrency market’s Fear and Greed Index, relevant increases toward the 33-point area stand out in the short term. The indicator maintains an upward slope and is approaching the “neutrality” zone after spending several weeks between “fear” and “extreme fear.” This reflects an important recovery in confidence perception, at least in the short term.
Source: Coinmarketcap
This point is key because, if confidence levels manage to maintain some stability, a more favorable environment for demand could start to form. This could also support more stable buying pressure around BTC over the next few trading sessions.
Technical outlook for Bitcoin
Source: StoneX, Tradingview
- Long trend line at risk: Although a long bearish trend line has remained in place for months in Bitcoin price movements, the recent price recovery has started to become relevant. Price is now facing the base of this bearish trend line, as well as the barrier formed by the 50-period moving average. If buying pressure manages to hold, this structure could start to come under pressure. This could change the chart structure and open room for a phase of indecision, or even for a more relevant buying bias over the coming weeks.
- MACD: Now, the MACD histogram remains close to the neutral 0 line. This suggests a balance in the strength of short-term moving averages. If this behavior continues, it could reflect an increasingly relevant phase of indecision in the short term.
- RSI: A similar dynamic can be seen in the RSI, as the indicator line remains close to the neutral 50 level. This suggests that the average of bullish and bearish impulses over the last 14 sessions remains balanced. This reading also reflects a phase of indecision that could continue to be relevant in the short term.
Key levels:
- 66,900 – Important resistance: This key bullish barrier corresponds to the area marked by the 38.2% Fibonacci retracement of the most relevant move on the chart. It also remains the most important high-level barrier from previous weeks to watch. Price movements above this level could fully break the dominant bearish trend line and open room for a more relevant buying bias over the coming weeks.
- 63,800 – Near-term barrier: This relevant neutral level corresponds to the base of the long bearish trend line, the 23.6% Fibonacci retracement level, and the 50-period simple moving average. This makes the area the most important short-term retracement reference. For this reason, price movements too close to this level over the next few sessions could highlight an important phase of indecision and even open room for the formation of a more relevant short-term sideways range.
- 57,790 – Definitive support: This area of recent lows coincides with the 2026 lows. Moves below this level could reinforce a dominant selling bias and open room for an important extension of the bearish trend line that has dominated for months of trading.
Written by Julian Pineda, CFA, CMT – Market Analyst
Follow him on: @julianpineda25
The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Products and services available depend on your location and the entity holding your account. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.
No comments:
Post a Comment