Nothing stands in the way of Bitcoin’s latest renaissance, even as gold falls and the US dollar slows its advance.
Bitcoin (BTC) closed above a crucial level on April 20 as the daily chart offered a long-awaited “buy” signal. Data from Cointelegraph Markets Pro and TradingView confirmed a daily close at $41,500 on Bitstamp on Tuesday. Strong performance, and sustained gains mean further rallies should follow, according to a trader watching a buy/sell indicator on daily periods.
The macroeconomic picture also favored Bitcoin on the day, after the US dollar found resistance to its own bull run. The US dollar money index (DXY) fell back after hitting 101 on Tuesday, its highest level since April 2020.
“We expect DXY correction, fueling BTC rebound,” replied popular trader Crypto Ed.
Gold also faced initial difficulties, shedding 2.6% from its highs of $1,998 earlier in the week.
However, BTC price action remained close to the daily close as a fellow trader and analyst Rekt Capital predicted turbulence to come in the longer periods.
“Bollinger Bands are tightening in price,” he told his Twitter followers, referring to the Bollinger Bands volatility indicator on the weekly chart. Then he added that, “this indicates increasing-price compression that often precedes strong volatility.”
Analysis Advises Caution on BTC
Data from Cointelegraph Markets Pro and TradingView showed the BTC/USD pair breaking above $41,000 on Tuesday, hitting five-day highs on Bitstamp.
In a refreshing change from the gloomy atmosphere over the holiday period, the largest cryptocurrency began to copy what gold had achieved days before, the latter since declining from $1,998 to $1,960 per ounce.
Equally energized, however, was the US dollar, which continued to consolidate its strength in a potential ongoing headwind for BTC.
The US Dollar Currency Index (DXY) held above the crucial 100 mark on the day, with analysts previously predicting that its next move would be a watershed moment for cryptocurrencies.
As crypto sentiment emerged from “extreme fear”, monitoring resource material indicators nonetheless called for a sober assessment of BTC price action.
Several moving averages, Twitter user @ MI_Algos said on Tuesday, April 19, needed to recover before the outlook could fundamentally change:
“Before you get too excited about yesterday’s #Bitcoin PA, remind yourself that bulls need to reclaim these key moving averages to validate a trend reversal. To avoid potential bull trap, watch for volume and wait for confirmations.”
No Missing “Buy the Dip” Signals
On-chain metrics were just as positive on the day, with several Cointelegraph notes continuing to suggest the completion of a floor structure.
Among them was the Bitcoin reserve risk chart, now firmly in its launch zone in what has historically advanced the start of bullish phases.
When it returned to the target zone, analyst Philip Swift described it as “btfd territory.”
In other words, those who buy BTC at current reserve risk levels have had a better chance of making “superior” profits in the end.
By Audy Castaneda
