Bitcoin Price against the US Dollar has Rebounded to the US$40,000 Resistance Level: What’s Coming?
At press time, the daily chart of the Bitcoin price against the US Dollar shows that the BTC/USD pair has jumped by 3% to the current price of US$38,678. This is a significant bounce back after the 26.5% slump a couple of days back. It has recovered more than US$7,000 since its recent low of around US$30,000 after a market-wide selloff. The Bitcoin market, as well as the cryptocurrency market, are trading at an upside of +3% today. To reverse the downward trend, the bulls have taken charge.
What’s Coming Next for Bitcoin?
- Daily Chart :
The Bitcoin price against the US Dollar is retracing and trading around the fast-moving 9-day moving average. The market price of BTC is staying below the resistance at US$40,127. It is a sign of bullish momentum. An increase in the bullish momentum of Bitcoin may make the price to rise above the channel.
If this strong resistance is breached above successfully, the BTC/USD pair will race towards US$42,000. The consecutive resistances above this level are US$43,800, US$45,800, and US$47,800 levels.
In case, the strong resistance at US$38,678 holds then the BTC price is likely to reverse and face the fast-moving 9-day moving average. If the bear pressure increases then the BTC price will move towards the 21-day moving average. The next downward support levels are US$33,600, US$31,600, and US$29,600 respectively.
The RSI (14) signal line on the daily chart is pointing towards the 70-level. If it crosses above this level then it may provide more buying signals.
- 4-Hour Chart :
The 4-hour chart of the BTC/USD pair is also pointing towards a bullish market outlook in the medium term. Bitcoin price is gaining momentum with the support of a 9-day moving average. However, the market is keeping its support levels at US$35,000, US$32,000, and US$31,000.
The RSI indicator is indicating a little bit of retreat before rebounding full throttle. Once it picks up the momentum, the resistance levels to take note of are US$44,000, US$46,000, and US$48,000.
At a time when the traders are a bit apprehensive about the upward movement of the BTC price against the US Dollar (especially after the 26.5% correction), it is essential for them to look at the medium-term outlook.
An example will make this clearer. The Bitcoin market saw a bloodbath in March 2020, especially during the COVID-19 crisis. The US stimulus payment of US$1200 was done in April 2020. If you invested this amount in Bitcoin, you could have earned around US$6,500 at the current valuation. This is because the Bitcoin price has increased by more than 440% in the last 9-months.
The Bitcoin rally started when the central banks all over the world started to inject capital aggressively into the financial market. The concern of investors has increased as their concern for the intensification of inflation has increased. That’s why gold and Bitcoin have become more attractive to them.
The budget deficit and a massive debt load (reaching the worst levels in the last 40 years) are the twin problems of the US economy. With these factors at the backdrop, the Fed was unable to increase the interest rates. It made gold and Bitcoin more valuable to invest in for the investors.
Dan Tapiero, the co-founder of 10T Holdings, has said:
“Most important macro chart of the month. Bernnnie takes over budget with total deficit worst in 40 years. Interest rates cannot rise with massive debt load. #Dollar bear market must continue or #equities will suffer. Perfect backdrop for #gold and #Bitcoin.”
Jack Dorsey, the CEO of Twitter, has said:
“The reason I have so much passion for #Bitcoin is largely because of the model it demonstrates: a foundational internet technology that is not controlled or influenced by any single individual or entity. This is what the internet wants to be, and over time, more of it will be.”
Scott Melker, a crypto trader, has said: “Ascending triangle, at resistance. A break through the top line should send this back to the all time high. Would also be a local higher high after making higher lows. Watching closely.”