Bitcoin (BTC), a slave to the U.S. Dollar on April 27, as the greenback spells new misery for all risk assets.
BTC/USD 1-hour candle charts (Bitstamp). Source: TradingView
BTC meets the support zone to hold
Data from TradingView and Cointelegraph Markets Pro showed that BTC markets were in a fragile state on April 27, as bulls struggled to control short-term support levels.
Bitcoin experienced a relief bounce after falling to $37 700 on April 26. This rebound culminated in a rebound up to $39 200 — an area that is crucial to flip back to support.
Michael van de Poppe, a Cointelegraph contributor, highlighted the $39,300 area as a jumping off point for Bitcoin/USD to strike short-term resistance. He suggested that the pair could target $42,600 if it were to be flipped.
He said, “If this one is lost, I think that we are looking at short opportunities” and that there could be confirmations of a bottom below $37,000.
“If we lose support at this level, it could lead to nosediving. We’ll trigger liquidity below the lows, then we might be testing lower levels. If the markets are ready to nuke, I see $30,000 as the ultimate bottom.
Van de Poppe is not the only one calling for a $10,000 reduction in government funding. In recent weeks, several people have suggested $30,000 as a target. Among them, former BitMEX CEO Arthur Hayes, and Bloomberg Intelligence chief commodities strategist Mike McGlone.
Hayes’ latest blog post expanded his short-term to mid-term view on asset prices. He predicts a dramatic renaissance of Bitcoin and gold that will reach $1 million and $20,000 respectively by 2030.
The XAU/USD exchange rate was $1,887 as of the writing. It had almost reached $2,000 on April 18.
1-day candle chart for XAU/USD Source: TradingView
As the critical resistance is near, dollar checks rise
Everything hinges on the U.S. currency index (DXY) as it was throughout the week.
Related: Purpose Bitcoin ETF Adds 1.1K BTC As Data Hints Investors Want to ‘Buy the Dip’
DXY reached 103.28 at April 27. This is DXY’s attempt to surpass its March 2020 highs. If it succeeds, this would be a multi-decade high.
Van de Poppe identified 103.77 the level to monitor, while a break in upside pressure would lower Bitcoin and other risk assets.
“If the DXY finds itself a top — and take liquidity there — I think you’ll want be long Bitcoin,” he said. He also predicted a “serious rush” for Bitcoin should a DXY-retracement occur in tandem with BTC/USD recovering support.
1-week candle chart for the U.S. dollar currency Index (DXY). Source: TradingViewcom. You should do your research before making any investment or trading decision.
Eileen Wilson –Technology and Energy
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