Bitcoin (BTC/USD) trades at $20,660 as of press time, the highest level in 6 weeks. The cryptocurrency had added an intraday of 7%. The gains were accompanied by a 157% jump in trading volumes.
Wednesday’s gains in Bitcoin come when investors have been calling for reversals at $19,000. That was after BTC looked to have bottomed at the level. There have been bull calls, going by insights data and analysts’ thoughts.
One factor used as a bullish indicator for Bitcoin is the US dollar index or DXY. In a session with his 278,000 YouTube followers, crypto analyst Jason Pizzino says DXY shows signs of exhaustion. The fatigue comes after a rally of more than 16% this year.
Pizzino says that DXY closed below the 50%-mark last week, an indication of bullish exhaustion. The analyst has earmarked 109 (points) as the probable lower top for DXY. The level will be the first lower top for DXY for a year. How will this point to a bullish market for Bitcoin?
Investors look at DXY as a gauge of the overall market. When the index weakens, it suggests that investors are developing a risk-on sentiment. As a result, they are moving their capital from the defensive dollar to risky assets like crypto.
Bitcoin pushes above moving averages as price overcomes tight trading
Source – TradingView
On the daily chart, Bitcoin has been trading within a tight range prior to Wednesday’s breakout. The breakout has seen the cryptocurrency break above the 20-day and 50-day MA, which trapped it.
An RSI reading of 65 shows that there are more buyers for the cryptocurrency. However, we are approaching the overbought level, which could usher in a correction.
Will Bitcoin continue to go higher
The current momentum looks sustainable for Bitcoin to the next resistance at $21,500 and further at $22,500. However, it must overcome the immediate and higher-up resistance zones for a sustained surge. An improved crypto sentiment could do much to help. Nonetheless, BTC price looks attractive for dip buyers at the current valuation.
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