“When prosperity comes, do not use all of it.” - Confucius
BTC climbed 2% to $26.75k, ignoring the continued rally in the US Dollar Index, as spot buyers shook out negative derivative bets. BTC's rise was sparked by spot market buyers, who triggered market buying and a short squeeze, or bears covering their bearish futures bets, pushing prices even higher.
BTC suggests new attempts at the key $27.15k level are possible with an overbought RSI in the short-term. However, a flip in sentiment in the risk asset market could mean a retest of support around $25k. The $20k area is a target for the bears.
The dollar-wrecking ball is on its way back. The Dollar Strength Index (DXY) reached its highest level in nearly ten months. Contrary to the practically consensus bearish dollar thesis, this is a robust move that has finally reached a natural location for consolidation.
DXY must begin to cool off and retest the previous resistance as potential support for BTC to recover. However, higher market liquidity tends to favour BTC long-term since investors may seek refuge in alternative assets to hedge against slow economic development.
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