Bears took control of the short-term trend in the price of Bitcoin. Analysts predict what could happen to the main cryptocurrency in the coming days.

The bullish momentum of Bitcoin’s price is at risk due to a strong recovery of the US dollar. The growing inverse correlation between the two assets has led to the decline of BTC, according to analysts.

Bitcoin is currently trading at around USD 11,619%, below the latest high of USD 12,468. This has caused a bearish transition of the trend in the short term.

Many believe that the recent big rally in the crypto market stems from the weakening of the US fiat currency and the inflow of capital from those seeking refuge.

Analysts at the exchange Kraken determined that the correlation between Bitcoin and gold has a maximum of 0.93. For this reason, investors sought refuge in this market, amid the tension generated by the spread of the pandemic, public expenditure, mixed corporate profits, inflationary fears, and the weakening of the US dollar.

Now the situation is opposite since there is a rebound in the US dollar that could lead the price of Bitcoin (BTC) to begin a strong correction or, at least, a consolidation phase.

Trend in the Medium Term

The current decline has barely affected the market, as indicated in the weekly graph. It is possible to see that the medium-term trend continues to remain bullish.

The 8-week EMA and 18-week SMA moving averages cross to the upside. Both are away from the price, indicating that the momentum is underway, but the reversal may be just beginning.

The resistance zone below USD 12,330 is the obstacle that bulls have had to face in recent days. For this reason, this could be the factor that finally determines a correction before a new rise.

As long as the support at USD 9,208 remains unbroken, the medium-term trend will remain bullish.

Trend in the Short Term

Bears’ recent takeover is the result of continued support breaks, as clearly shown in the daily graph.

The 18 SMA and 8 EMA crossed to the downside, supporting the short-term bearish transition. Therefore, they may work as dynamic resistances before a new drop.

In recent months, Bitcoin’s price has experienced a strong positive momentum. For that reason, the 200-day SMA remains bullish, quite far from the current price.

Analysts’ Predictions

Bears took control of the market in the short term, indicating that a drop is quite likely to occur in the next few days.

However, the long- and medium-term trend remains strongly bullish. For that reason, a reversal is healthy and will serve to cope with demand from investors seeking low prices.

That there has been a small bullish slope in recent weeks, as revealed in the daily graph. Breaking it will be an important confirmation of the search for lower levels.

Concerning breaks of horizontal levels, support at USD 11,392 recently had visits and rejections, which in turn converges with the aforementioned bullish line. Crossing this support effectively will make way for a deeper drop.

The current price has several levels of demand as a result of the compression in which the price of Bitcoin has been in August.

By Willmen Blanco

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