Bitcoin BTC/USD recovers the $20,000 level, but how far can it go?
Bitcoin has jumped above the $20 price level amid a fading momentum
The token remains correlated to equities, which equally saw some bullishness
The dollar index, which usually moves inversely to BTC, may be due for a reversal
Bitcoin BTC/USD is up 5% in the past day, the highest level in two weeks. The run-up has driven the token to reclaim the $20,000 price level. In the weekly outlook, BTC is up 6.81%, trading at $20,197 at the time of writing.
Despite the recovery, BTC has remained subdued since trading at $69k in November last year. The sell-off represents 71% loss from the ATH and 56% year-to-date. Nonetheless, a few market dynamics could be behind the positive sentiment – the state of the forex and stocks market.
Digital assets have been moving similarly to the stocks. The trend is far from the notion that cryptos have decoupled from the latter. On Tuesday, S&P 500 jumped 0.7% amid fears of a possible global economic recession. Away from stocks, forex investors are speculating on the US dollar index.
The index, which tracks the dollar against global currencies, is up 18% YTD. BTC has been moving inversely to the metric, more often than not. With the index nearing the top, analysts believe BTC could be preparing for a price pump.
Bitcoin surges amid fading momentum
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From the daily chart above, bitcoin has been ranging between $18k and $25k since June. Zooming out further, the Stochastic Oscillator is above 80 at the oversold zone. The cryptocurrency is supported by the 20-day MA but faces resistance from the 50-day MA. The next possible resistance is $21,792.
Bitcoin has surged in the daily chart but lacks the strength to maintain the uptrend. Key indicators are currently looking bearish. A price above $21k may welcome a bullish momentum. As it is, Bitcoin may not sustain the pump unless the current sentiment changes.