Bitcoin (BTCUSD) has kicked off the week on a positive note, gaining 1% during the Asian and early London sessions. This rise follows a robust previous week where the cryptocurrency soared nearly 8%. The recent surge in Bitcoin prices comes amidst a backdrop of weakening Dollar strength, fueling increased risk appetite among investors.
Indicators pointing to a softening labour market in the U.S. and easing inflation have buoyed Bitcoin, pushing it above the $65,000 mark. Additionally, expectations of reduced inflationary pressures and the possibility of future rate cuts have further bolstered risk sentiment, contributing to Bitcoin’s recent uptick.
As investors closely watch the upcoming U.S. FOMC Minutes and PMI data, the potential impacts on Bitcoin’s movements remain significant. The current economic landscape, characterized by potential shifts in monetary policy, plays a crucial role in shaping market sentiment and influencing asset prices. With Bitcoin continuing to rally, the question remains: will this upward momentum be sustained in the face of new economic data, or will market dynamics shift once again?
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 as sentiment favoured upside potential. This shift was evident as the price converged with the 100-day moving average, signalling a potential reversal.
Support emerged at the 61024.51 level, prompting a breakout from the descending channel pattern. However, as the cryptocurrency surged, resistance at the 67272.73 level, formed from an April selloff, limited further upward movement amid overbought RSI conditions. This resistance level is crucial, as it reflects heightened selling pressure from previous highs.
Subsequently, a downturn ensued, but downside momentum was curtailed at the 23.60% Fibonacci Retracement level. This level served as an intermediate support, prompting a bullish reversal. Looking ahead, if upside momentum persists, attention may turn to retesting the 67272.73 resistance level. Conversely, if selling pressures resurface, the 23.60% Fibonacci level could act as a point of interest to the downside.
Summary
Bitcoin’s momentum continues as it tests the critical $67,272.73 resistance level. If selling pressures return, support at $61,024.51 and the 23.60% Fibonacci Retracement level will likely be key. Economic data, including U.S. FOMC Minutes and PMI, will significantly influence Bitcoin’s next move.
Sources: Reuters, TradingView
Piece Written By Nkosilathi Dube, Trive Financial Market Analyst
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