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Bitcoin recovers the $20,000 level, but how far can it go?

Bitcoin has jumped above the $20 price level amid a fading momentum The token…

The post Bitcoin recovers the $20,000 level, but how far can it go? appeared first on CoinJournal.

  • Bitcoin has jumped above the $20 price level amid a fading momentum

  • The token remains correlated to equities, which equally saw some bullishness

  • The dollar index, which usually moves inversely to BTC, may be due for a reversal

Bitcoin BTC/USD is up 5% in the past day, the highest level in two weeks. The run-up has driven the token to reclaim the $20,000 price level. In the weekly outlook, BTC is up 6.81%, trading at $20,197 at the time of writing.

Despite the recovery, BTC has remained subdued since trading at $69k in November last year. The sell-off represents 71% loss from the ATH and 56% year-to-date. Nonetheless, a few market dynamics could be behind the positive sentiment – the state of the forex and stocks market.

Digital assets have been moving similarly to the stocks. The trend is far from the notion that cryptos have decoupled from the latter. On Tuesday, S&P 500 jumped 0.7% amid fears of a possible global economic recession. Away from stocks, forex investors are speculating on the US dollar index.

The index, which tracks the dollar against global currencies, is up 18% YTD. BTC has been moving inversely to the metric, more often than not. With the index nearing the top, analysts believe BTC could be preparing for a price pump.

Bitcoin surges amid fading momentum

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Source: TradingView

From the daily chart above, bitcoin has been ranging between $18k and $25k since June. Zooming out further, the Stochastic Oscillator is above 80 at the oversold zone. The cryptocurrency is supported by the 20-day MA but faces resistance from the 50-day MA. The next possible resistance is $21,792.

Concluding thoughts

Bitcoin has surged in the daily chart but lacks the strength to maintain the uptrend. Key indicators are currently looking bearish. A price above $21k may welcome a bullish momentum. As it is, Bitcoin may not sustain the pump unless the current sentiment changes.

The post Bitcoin recovers the $20,000 level, but how far can it go? appeared first on CoinJournal.

Source: CoinJournal: Latest Bitcoin, Ethereum & Crypto News

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4 bearish factors for Bitcoin this week

The Federal Reserve meeting scheduled on Wednesday may be hawkish for the dollar Bitcoin might give up some of its 2023 gains on a hawkish Fed All eyes are on the Fed’s view on inflation, growth, future interest rates, and quantitative tightening The Federal Reserve’s monetary policy decision is scheduled this week. It is the […]

The post 4 bearish factors for Bitcoin this week appeared first on CoinJournal.

  • The Federal Reserve meeting scheduled on Wednesday may be hawkish for the dollar
  • Bitcoin might give up some of its 2023 gains on a hawkish Fed
  • All eyes are on the Fed’s view on inflation, growth, future interest rates, and quantitative tightening

The Federal Reserve’s monetary policy decision is scheduled this week. It is the first time the FOMC (Federal Open Market Committee) meets in 2023, and the stakes are high for the US dollar.

Bitcoin has strengthened against the US dollar in January so far, in sync with other fiat currencies. Therefore, whatever the Fed decides on Wednesday will affect Bitcoin price too.

A hawkish Fed may turn up being bearish for Bitcoin. These are the four areas where the Fed may express its hawkishness: inflation outlook, growth outlook, interest rates level, and quantitative tightening.

Inflation outlook

The Fed is committed to bringing inflation to its 2% target. This is why it has raised rates so aggressively, so if the Fed says that inflation is embedded and upside risks remain, then the US dollar should move higher.

In this scenario, the market will bet that the Fed sees ongoing rate hikes as appropriate.

Growth outlook

The currency stance is that a sustained period of below-trend growth is likely. If the Fed changed its view and sees recession required to have a material impact on the inflation outlook, that would also trigger a sharp move higher in the dollar.

Interest rates

Ultimately, it is all about the interest rate level. The funds rate range has reached 4.25%-4.50%, and all eyes are on what the Fed does and says on Wednesday.

The base case scenario is that the Fed will hike by 25bp and says that ongoing interest rate increases are appropriate. Therefore, anything more than that should be bullish for the dollar and bearish for Bitcoin.

For example, the Fed might hike 50bp. This is a risk going into the meeting, especially considering that inflation is not backing down as fast as initially thought.

Quantitative tightening

The Fed currently shrinks the balance sheet at a pace of $95 billion/month. A decision to accelerate the balance sheet reduction would be very hawkish for the dollar.

The post 4 bearish factors for Bitcoin this week appeared first on CoinJournal.

Source: CoinJournal: Latest Bitcoin, Ethereum & Crypto News

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