Despite a significant downside in the US stock market on Tuesday, driven by a surge in long-dated US yields to new multi-decade highs, and heightened anticipation of a sustained policy of higher interest rates courtesy of the US Federal Reserve, Bitcoin (BTC) appears unfazed. Currently trading in the $26,200s, Bitcoin shows a drop of more than 17% from the yearly high point of July -$31,800. Nevertheless, it still stands as a beacon, over 5% up from its initial monthly lows, hugging its 21DMA firmly.
Observers have noted a noticeable ebbing of enthusiasm, yet investors evince keen interest in Bitcoin accumulation. Possible reasons might be the upcoming halving next year and excitement surrounding potential spot Bitcoin ETF approvals. These seem to be factors maintaining Bitcoin’s price composure – anchoring it in the-upper-$20,000s region for some time now. However, some argue a case for an impending dip back towards the $20,000 mark.
One train of thought emphasizes the influence of mounting Macro headwinds. Bitcoin has been hit with a 15% blow since the dawn of Q3, correlated with an ascension in US bond yields and the US Dollar Index (DXY). The DXY recently attained its highest notch since December 2022, standing proud above 106. Fueling this trend are increasing speculations that the US Federal Reserve will stick to elevated interest rates for an extended period, as inflation is touted to linger longer at structurally higher levels in the light of the US economy’s consistent outperformance.
However, an observation worth a second glance is Bitcoin’s price stability despite the continued rise in US yields and dollar strength. Perhaps the cryptocurrency’s current pricing does not fully mirror the recent shifts in the macro landscape. Consequently, some are predicting a fallout that may plunge Bitcoin back within the confines of low $20,000s.
Some Bitcoin enthusiasts are raising eyebrows at the cryptocurrency’s recent retreat into a bearish descending triangle. Regarded as crucial bearish technical structures, a depression below the $25,000 safety could invite a torrent of short-term technical sell-offs. Take note – the next big safety zone lurks just beneath $20,000.
Additionally, another source of bearish scepticism from the technical viewpoint is linked to Bitcoin’s major moving averages. Bitcoin, having twice snubbed its 200DMA since falling below it in August, could be signalling a shift for the worse in its medium-term outlook. This is reminiscent of its strong rebound from the 200DMA back in March, but in reverse, hinting at a negative medium-term performance. Unnerving sceptics further is this month’s “death cross”, an instance where Bitcoin’s 50DMA fell under its 200DMA – suggesting a bearish swing in the market’s medium-term momentum.
Source: Cryptonews
