Bitcoin slips back above the key $20,000 threshold for the first time in a week on Tuesday, with BTC/USD up nearly 6% since then, potentially starting a sustainable rebound for the market’s most important currency .
In fact, Bitcoin has hit a peak of $20,344 so far, while other cryptocurrencies have largely risen. As a result, the total capitalization of the crypto market is again at the gates of the main threshold of $1 trillion, at $970 billion at the time of writing this report, after a gain of about $50 billion since yesterday.
Bitcoin returns above $20,000 despite struggles in the stock market
It is worth noting that the Bitcoin price recovery started yesterday when stocks fell to fresh 2022 lows, casting doubt on the supposed correlation between BTC and US common shares. Remember that there was widespread panic in the financial markets yesterday, faced with the dramatic rise in the dollar and the collapse of the British pound.
However, we are now seeing some easing as US stock futures are rising, and European stocks are also rising, ending a 3 session losing streak.
In addition, the Dollar is retreating, which also reduces the pressure on Bitcoin. The US Dollar Index is indeed trading at 113.72 at the time of writing, down from yesterday’s 20-year high of 114.18.
The continuation of Bitcoin’s recovery therefore depends on the sustainability of the lull observed in today’s markets. However, many events are likely to impact investors this week, including some today with durable goods orders especially from the US at 2:30 pm, then US consumer confidence and new home sales at 4 p.m
A good number would suggest to the market that the Federal Reserve (Fed) has a free hand to continue raising rates, a bearish factor for Bitcoin. Conversely, troubling data would suggest a possible slowdown in Fed policy tightening, which could help BTC/USD accelerate its rebound.
However, macro news will not be the only determining factor for Bitcoin over the next few hours. In fact, the BTC/USD is reaching a critical technical threshold, and its response to it could be decisive for the rest of the events.
A major bullish signal in sight for BTC/USD
As can be seen on the daily chart below, Bitcoin is indeed in a long-term downtrend that extends from the November 2021 high.
A clear break above this line would be a big bullish sign, which could initiate a close towards $25,000.
However, the 100-day moving average, currently at $21,242, could offer resistance ahead of that. On the downside, a BTC / USD return below $20,000 is a negative sign. In this case, last week’s lows just above $18,000 will be marked after the Fed meeting, with the annual low near $17,600 as the first possible supports to watch.
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