- Bitcoin gained over 20% from the recent low.
- eToro’s Mati Greenspan points out Bitcoin’s dependence on US Dollar sentiments.
Bitcoin jumped above critical $7,000 handle and reached the highest level since August 07 on Tuesday amid global cryptocurrency market correction. The digital coin No. 1 clawed back about 20% of its value from the recent low of $5,900 and broke the short-term bearish trendline (currently at $6,907), while the capitalization of the digital assets market topped $230M. BTC/USD is changing hands at $7,042, up 1.5% on a daily basis and mostly unchanged since the beginning of Wednesday.
Experts attribute the bullish momentum in Bitcoin and other coins to the positive correlation with EM assets and commodity markets, which tend to grow on the back of US Dollar weakness.
“This kind of behavior is typical of commodities. As the buck falls, it takes more dollars to buy a barrel of oil or an ounce of gold and vice versa. My suspicion here is that as the dollar dominates the markets, people are placing more faith in it over bitcoin and of course, vice versa when the dollar falls,” Mati Greenspan, a senior market analyst at eToro explains.
Fundstrat’s Tom Lee expressed similar views earlier this week.
Bitcoin’s technical picture
BTC/USD stays close to the critical $7,000, which now serves as a support level. While above, the coin has a chance to resume the upside with the first aim at $7,128 (Tuesday’s high) followed by $7,400 (38.2% Fibo retracement level). On the downside, once below $7,000, the sell-off may be extended towards the above-mentioned trendline at $6,907 closely followed by SMA50 (1-hour chart) at $6,876 and 23.6% Fibo retracement right under $6,800 handle.
BTC/USD, 1-hour chart
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