Bitcoin

Bitcoin faces 50-day EMA resistance after rising above $ 51,000

Bitcoin bulls regained strength after breaking the $ 50,000 mark last week and continued to hold that psychological level as support on December 27th. Meanwhile, the in-line safe store rival, its flagship US dollar, also bounced off an important price floor. This means it will continue to consolidate to establish an upward trend through 2022.

Break out of a symmetrical triangle

The US Dollar Index (DXY), which measures the strength of the US dollar against a basket of major currencies, is trending toward the apex of a “symmetrical triangle” pattern on the daily chart.

Once there, DXY viewed the structure’s lower trendline as solid support, suggesting a bullish breakout.

Daily DXY chart with symmetrical triangle setup | Source: TradingView

When the DXY breaks out of the symmetrical triangle, the bulls technical profit target is as high as the maximum distance between the top and bottom trend lines of the structure, measured from the breakout point. Therefore, the US dollar could head towards the 97.8 level in the coming sessions.

US dollar outperforms euro

The bullish outlook for the US dollar contrasts with the Fed’s plan to cut bond purchases. In particular, the US Federal Reserve signaled in early December that it was ready to tighten monetary policy, which came faster than expected, in addition to three rate hikes in 2022.

Meanwhile, some of DXY’s recent strength comes from the ongoing euro area cash glut.

“A wave of economic stimulus programs launched by the European Central Bank (ECB) in the wake of the Covid-19 pandemic has left banks in the euro area with excess liquidity,” said FactSet’s financial researcher notice.

EUR / USD daily frame chart shows a bearish trend since May 2021 | Source: TradingView

As a result, these banks have now increased their euros through the repo facility to US dollars

The Fed’s inversion, which gives them a 0.05% interest rate, is better than short-term European government bonds, which come with negative yields.

On December 20, nearly $ 1.7 trillion flowed into the Fed’s repo facility, the highest single-day injection ever. Bitcoin rises above USD 51,000 as the dollar signals superior strength against the euro Daily inflows into the Fed’s reverse repo facility have been increasing since May 2021

| Source: Fed

Fractal predicts a rally for

Bitcoin’s recent rally above $ 51,000 came as the price tested a multi-month upward sloping trendline for support, as shown in the chart below. Bitcoin rises above USD 51,000 as the dollar signals superior strength against the euro BTC / USD daily frame price chart appears ascending trend line

|

Source: TradingView However, Bitcoin price is currently encountering resistance within the 50-day exponential moving average (50-day EMA) – an instrument that is limiting Bitcoin’s attempt to recover in November, so the bulls are likely to be very tightly controlled under its pressure. But for longer periods of time, Bitcoin is likely to continue its momentum into 2022. For example, the independent market analyst Rekt Capital

emphasize

that Bitcoin repeated a trend from the May-July trading session that then rocketed the price to an all-time high (ATH) of $ 69,000.

“Bitcoin formed a similar range within these two EMAs in May (orange circle).” Bitcoin rises above USD 51,000 as the dollar signals superior strength against the euro Weekly BTC / USD frame price chart including fractal “Bull Market EMAs”

|

Conversely, if Bitcoin falls below the 50-week EMA, the likelihood of testing its orange 200-week EMA based on the same fractal becomes higher. Bitcoin rises above USD 51,000 as the dollar signals superior strength against the euro Weekly BTC / USD price chart with 200 week EMA support line

CoinX

Recent Posts

Bitcoin Spot ETF Inflows Hit $1 Billion Led By BlackRock

Bitcoin Spot ETF inflows hit $1.005B on Nov 21, led by BlackRock’s $608M and Fidelity’s…

4 minutes ago

Best Altcoins to Buy Today: Qubetics Rides 1000x Potential to Hit $2.6M, Ethereum Stays Rangebound, Tron USDT Transactions Hit $52B

Discover the best cryptos to buy and hold today: Qubetics leads with 1000x potential, Ethereum…

2 hours ago

Trump Media Company Is Pushing New Venture For Crypto Service

With the platform facing a cracked whip, Trump Media company is expanding into new business…

3 hours ago

Crypto Advisory Council Now A White House Position Attracting Leaders

Major crypto firms, including Ripple, Kraken, and Circle, are competing for spots on President-elect Donald…

4 hours ago

Analyst Sounds Major Breakout Alert Amid Shiba Inu, WallitIQ, And Dogecoin Price Recoveries

Analysts highlight a breakout alert as Shiba Inu (SHIB), and Dogecoin show signs of recovery…

4 hours ago

SEC Chair Gary Gensler Will Lose Power From January 20

SEC Chair Gary Gensler will step down on January 20, 2025, coinciding with President-elect Donald…

4 hours ago

This website uses cookies.