Bitcoin breaks above $20,000 due to falling US Dollar

Bitcoin breaks above $20,000 due to falling US Dollar

Bitcoin (BTC) bounced back above $20,000 on September 9 when a much-anticipated “short liquidation” occurred.

Hourly candlestick chart of the BTC/USD pair (Bitstamp). Source: Trade View

Trader: BTC could hit $25,000

According to data from Cointelegraph Markets Pro and TradingView, the BTC/USD pair gained as much as $2,700 (8.7%) within hours of the day, hitting the highest level since August 26.

After weeks of volatility punctuated by continuous downward moves, bitcoin finally gave the bulls what they wanted.

According to the famous Il Capo of Crypto trading Twitter account, the advantage still had the potential to continue at the time of writing, with the price of BTC targeting $21,000.

“The bears are very weak here, I think it will pick up soon,” he said. intended.

Il Capo de Crypto has long predicted a relief bounce taking bitcoin to around $23,000 before the downturn resumes.

“It is crucial for bitcoin to return to the $20,000 zone,” said United Michaël van de Poppe, CEO and founder of the trading company Eight.

“If that happens, it looks like the range will be another $23,000 to $25,000.”

Liquidations of short bitcoin positions on exchanges tracked by on-chain tracking platform Coinglass totaled $64 million on September 9, matching the August 11 total.

BTC liquidation chart. Source: Coinglass

The “parabolic expansion” of the DXY is tested

This move coincided with a significant correction in the strength of the US dollar in general, following a massive increase in the European Central Bank’s (ECB) benchmark interest rate.

Also Read: Bitcoin Price Hits 10-Week Low Amid ‘Painful’ US Dollar Recovery Warning

Despite its previous 20-year high, the US Dollar Index (DXY) fell a full percentage point to 108.6 at the time of writing.

$DXY Parabolic Expansion: 107.70 is the 50% fib level of the last decline. This level will be the next floor for the continuation of the parabolic expansion or, the sign that the trend is losing momentum if we are below. #Bitcoin – Kevin Svenson (@KevinSvenson_) September 8, 2022

Analysts have often claimed that the fate of crypto markets depends on the movements of the DXY, which cannot be predicted as the Federal Reserve contemplates another rate hike next week.

“Bitcoin looks like an inversion chart with the DXY pattern in 2021,” said Note the trader Hamza.

Daily candle chart of the US Dollar Index (DXY). Source: Trade View

The views and opinions expressed herein are solely those of the author and do not necessarily reflect those of All investment and trading involves risk. You should do your own research before making a decision.

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