Leaderboard 728×90
Leaderboard 728×90

Bitcoin could see $25K by March 2023 as U.S. dollar prints ‘death cross’ — analysis

Bitcoin (BTC) shows the potential of stretching its ongoing price recovery to $25,000 by March, based on a mix of bullish technical and macro indicators.

Bitcoin price exits descending channel range

First, Bitcoin’s potential to hit $25,000 comes from its exit from a prevailing descending channel range.

A bull run or bull trap?

— Cointelegraph (@Cointelegraph) January 16, 2023

Notably, the BTC price broke out of the range late last week while accompanying a rise in its trading volumes. The cryptocurrency’s move upside also pushed the price above its resistance confluence, comprising a psychological price ceiling of $20,000 and its 20-week exponential moving average (20-week EMA; the green wave) near $19,500, as shown below. 

BTC/USD 1-week candle chart (Coinbase). Source: TradingView.com

Breaking three resistance levels with strong volumes shows traders’ conviction about an extended price rally. Should it happen, Bitcoin’s next upside target appears at its 200-week EMA (the yellow wave) at around $25,000 — a 20% rise from current price levels.

Dollar forms a “death cross”

Bitcoin’s bullish technical outlook appears against the backdrop of a relatively weaker U.S. dollar, down due to expectations that the Federal Reserve will stop raising interest rates over lowering inflation.

The two assets have moved inversely to each another mostly since March 2020. As of Jan. 16, the daily correlation coefficient between Bitcoin and the U.S. dollar index (DXY), a barometer to gauge the greenback’s strength versus top rivaling currencies, was -0.83, according to TradingView.

BTC/USD and DXY correlation coefficient. Source: TradingView

A traditional technical setup sees more losses for the dollar ahead.

Dubbed the “death cross,” the setup appears when an asset’s 50-period moving average crosses below its 200-period moving average. For the dollar, the death cross shows its weakening momentum, meaning its short-term trend has been underperforming its long-term direction.

DXY daily price chart. Source: TradingView

“Expecting more downside in the mid to long term,” independent market…

..

Read More

About The Author

Related posts

Leave a Reply

Your email address will not be published. Required fields are marked *