Over the last week, Bitcoins price has fallen -4.30%. With BTC losing some bullish momentum this week, it will be important to follow key technicals and fundamentals in the next 24-48 hours. At the time of this report, Bitcoins price is hovering right around $11,308.
So far this week, Bitcoins positive momentum has come to a halt as the digital asset has fallen -4.30% over the last week. It comes with no surprise that the major altcoins are also selling off. Over the last week, altcoins have seen the following price action:
- Ethereum: -8.15%
- XRP: -6.43%
- Chainlink: -10.27%
- Litecoin: -9.91%
Bitcoin Price Catalyst
In a recent post by Visionary Financial on Twitter, it was outlined that Bitcoin has historically done well in scenarios where the US dollar is falling. During the week of July 20, Bitcoins price experienced significant momentum as the US Dollar, ( measured by DXY ) was falling from 98 to 92. During this sell-off in USD, Bitcoins price rallied from $9,200 all the way to $12,000. This is one of the many scenarios in which BTC has been highly uncorrelated to the US Dollar.
Coming into August, many investors believed the Dollar index could fall below 90 which could essentially be bullish for Bitcoin based on historical price action. So far this month, the Dollar index has continued to consolidate, holding 93 levels throughout the month. As the Dollar was consolidating, Bitcoins price was also trading sideways as many investors were waiting to see Dollar price action.
With many traditional market analysts calling for a “Dollar rally,” it has been a short-term blow to BTC/USD. As the US Dollar has inched up slightly over the last week, Bitcoins price has fallen -4.30%.
What To Keep An Eye On This Week
Despite the Dollar inching up over the last week, it will be important to watch the Fed Chairman, Jerome Powell conduct the virtual conference on inflation this Thursday. With the Federal Reserve showing interest in pushing inflation higher, it could result in a scenario where the US dollar sees further declines. Based on historical price action, this could spur upward momentum for Bitcoins price in the near term.
Bitcoin Technical Analysis
In the next 24-48 hours, it will be important to follow the Bitcoin technicals. Most recently, Bitcoin attempted to test strong resistance at $12,500, but ultimately failed to crack those levels. With the recent sell-off, many traders will be eyeing the $10,600 support levels. As you can see from the chart below, $10,600 represents a strong support level, and also resides right around the 50 day moving average. Bitcoins price could very well test $10,600 in the next couple days.
If Bitcoin does test the $10,600 support levels, it will be crucial to see its price maintain those levels and build stronger support. In the event that $10,600 is rejected, investors could very well see a $9,100 retest, which would represent a -19% drawdown from current levels. If BTC can stay above $10,600 support, we believe it will gear up for the next leg up. $12,500 still remains a very strong resistance level. Breaking through $12,500 should spark a strong leg up.
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