According to analysts, bitcoin (BTC) is currently giving signals that indicate it is nearing bottom. Therefore, a question arises: should we buy the heart of this dip? Should we wait for the tank to fail before investing? For experts, the first solution is best. According to them, the swim is to buy “move wisely due to the strength of the dollar and other factors.”
The dollar can still strengthen
Since the collapse of the Terra ecosystem, everything is bad in the cryptocurrency market. Prices of bitcoin (BTC), ether (ETH) and altcoins all went down. The bad sell began to grow from the end of 2021 as the US dollar gained strength and the US Federal Reserve indicated that interest rates would rise during the year.
According to a recent report from Delphi Digital, the DXY now has a 14-month RSI “It crossed the 70 mark for the first time since rising from late 2014 to 2016.”
Why is this news important? This is due to 11 of the 14 previous cases “caused by stronger dollars – 78% of the time over the next 12 months, ” suggesting that the pain for the assets may worsen.
On average, the DXY gained about 5.7% after its RSI broke above 70, which was based on the situation as of May 13, “The DXY index would be just below 111, the highest level since 2002”. “Assuming that the correlation between DXY and bitcoin remains relatively strong, that would not be good news for the cryptocurrency market ”, says an expert.
It’s time!
While the outlook seems bleak for the king of cryptocurrencies, analysts are trying to stay positive. Indeed, if we look at it from a global perspective, bitcoin is currently retesting its exponential moving average (EMA) at 200 weeks, nearly $ 26,990, which is “Historically has been a key area for price reductions”, by Delphi Digital.
Separately, bitcoin is still above its long-term weekly support range of $ 28,000- $ 30,000. However, this zone has always been a solid support zone for cryptocurrency.
While many traders have been panicking over the past few days, Pantera Capital CEO Dan Morehead has taken a contrarian approach: “The best buy when the price is well below the trend. Now is one of those times. ”
The cryptocurrency market is in a period of instability and bitcoin (BTC) is no exception. For analysts, now is the time to invest in this digital asset, even if it doesn’t seem to fit.
Source: Cointelegraph
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