Bitcoin (BTCUSD) has kicked off the week on a positive note, with a 2% gain during the Asian and early London sessions, building on its momentum from the weekend.
The recent surge in Bitcoin prices comes amidst a backdrop of weakening Dollar strength, fuelling increased risk appetite among investors. As indicators point to a softening labour market in the U.S., including a rise in jobless claims, Bitcoin has been buoyed as it trades above the $60000 mark.
Additionally, expectations of reduced inflationary pressures on the back of a weaker labour market and the possibility of future rate cuts have further bolstered risk sentiment, contributing to Bitcoin’s recent uptick. With all eyes now turning to upcoming U.S. inflation data, the trajectory of interest rates hangs in the balance, potentially influencing Bitcoin’s future movements.
Technical
Bitcoin’s recent price action paints a dynamic picture of market sentiment and technical indicators. Initially entrenched in a downtrend and trading below the 100-day moving average, Bitcoin’s fortunes began to shift, with sentiment favouring upside potential. This sentiment shift was evident as the price converged with the 100-day moving average, signalling a potential reversal.
Support emerged at the 56409.51 level amid oversold RSI conditions, sparking a notable rebound. However, as the cryptocurrency surged, resistance materialized at the 65500.00 level, driven by overbought RSI conditions, limiting further upward movement. Subsequently, a downturn ensued, but downside momentum was curtailed at the 50% Fibonacci Retracement level, serving as an intermediate support and prompting a bullish reversal.
Looking ahead, if upside momentum persists, attention may turn to retesting the 65500.00 resistance level. Conversely, if selling pressures resurface, the 50% level could act as a point of interest to the downside.
Summary
Bitcoin’s recent positive momentum, supported by weakening Dollar strength and expectations of reduced inflationary pressures, underscores its resilience amidst market fluctuations. With attention focused on upcoming U.S. inflation data, key technical levels like the $65500.00 resistance and 50% Fibonacci Retracement level will likely guide future price movements.
Sources: Reuters, TradingView
Piece Written By Nkosilathi Dube, Trive Financial Market Analyst
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