The ongoing history of the past few months in the cryptocurrency market has been confusion over whether Bitcoin (BTC) is destined for further decline or is finally ready to hit new highs.
Bitcoin’s price action and data from previous corrections suggest that the current battles for the top cryptocurrency could last a little longer due to the strengthening dollar, the possibility of weakening economic stimuli, and a number of technical factors related to Bitcoin’s price action.
A strong dollar threatens Bitcoin’s recovery
According to data from Delphi Digital, one of the biggest drivers hurting risk assets around the world is the stronger US dollar, which appears to be trying to reverse the trend after falling below 90 in late May.
The soaring dollar halted the year-long upward trend in US 10-year Treasury yields, which also suggests that economic expansions will slow down in the first half of 2021 and a new wave of Covid-19 infections threatens the global economic recovery .
Fractals and the cross of death indicate that the correction is not yet complete
The near-term outlook for Bitcoin remains pessimistic as previous instances of the Death Cross that appeared on BTC’s chart in late June were followed by a correction phase that could last almost a year.
According to analysts at Delphi Digital, the 12-month moving average is being tested as support and a break below that level would signal another downtrend for BTC price.
The 12-month moving average has been an important level of support for Bitcoin in the past. So the development of the price near this level could determine whether the current uptrend remains intact.
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Overall, traders should be cautious as low volumes have historically resulted in higher volatility, while fewer open bids can lead to rapid price fluctuations.
As Kevin Kelly, a certified financial analyst at Delphi Digital, explains, “the near-term outlook becomes a little more bearish as and as we break these key levels” near $ 30,000.
“I don’t necessarily think we’ll see such a significant drawdown as we did after December 2017, early 2018, and until the end of the year. But I think, given the market structure, we could possibly expect a little more volatility and possibly more headwind here in the short term. ”
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