Bitcoin / USD: Technical Analysis
The end of last week was very difficult for most bitcoin investors as there was a massive sell-off, the price dropped below $10,000 several times but seems to have found short-term support at that level.
Bitcoin saw significant changes in its performance as it took more than 15% losses from the $12,050 level to rebound at $9,900 and then rebound above $10,000, the price is currently trading well above $10,200 and is likely to continue rising as long as it is above the $10,000 support area .
The psychological barrier at $10,000 is currently acting as a support area, indicating that support for a short-term retracement may be on the horizon, the apparent breakout of the $11,200 area triggered a broad sell-off across the markets.
Before bitcoin fell to the $10,000 support it traded at $12,050, later it fell to $9,900 and the price corrected above $10,000, amid fresh concerns among bitcoin investors about the strength of the US dollar index and monetary policy in Europe.
Some believe that The strength of the US dollar And its remarkable recovery from the lowest levels in more than two years recorded earlier in trading, in addition to the growing concerns about the continuation of the expansionary monetary policy in Europe were the main reasons for the massive sell-off of the US currency.
Bitcoin correlation with stocks
The decline in the price of Bitcoin also appeared along with the traditional markets, for example the futures contracts linked to the index fell Standard & Poor's 500By 0.53% the Nasdaq Composite Index is also down.
Bitcoin and US stocks have formed a strange relationship since the defeat of the major global market in March 2020, and traders who suffered losses in stocks were able to raise cash by selling whatever profitable assets they were holding at the time.
Analysts see that markets are ready to repeat what happened earlier in the current September 2020, as they say there was no clear reason for the decline in US stocks, and they also noted that the majority of companies, especially technology-focused companies, were trading at high levels of their actual earnings multiples. It caused a short-term downward correction.
Meanwhile, bitcoin, which was trading 200% higher from its mid-March low, may have been affected by a tech stock slide that eventually boosted the value of the US dollar.
In the coming weeks, investors should be aware of the movements in the stock market to determine the expected behavior of Bitcoin and the cryptocurrency markets in general.
If the bulls fail to gain traction and Bitcoin drops below the $10,150 support level, it could revisit the $10,000 and $9,880 support levels.