In Brief:
Bitcoin (BTC) is inching closer to the $28,500 mark, maintaining its bullish momentum at the start of October. However, caution is advised as analysts warn that the cryptocurrency might face an "upside wick" if it fails to break through a critical resistance level. The recent monthly candle close below $27,100 has established this level as a significant barrier. Despite the positive market sentiment, some observers note signs of disbelief among traders. Additionally, the U.S. dollar's resurgence is being closely monitored, with potential implications for various financial markets.
Full Story:
Bitcoin (BTC) enthusiasts are eagerly watching the cryptocurrency as it approaches the $28,500 mark, demonstrating a strong start to the month of October. Nevertheless, caution is in the air as analysts raise concerns about a potential "upside wick" looming over Bitcoin's price.
The recent monthly candle close below $27,100 has set a critical resistance level, referred to as "black" in the crypto community. While BTC's current price stands more than 5% above this level, analysts are wary that it might not be sufficient to sustain the bullish momentum. Historically, Bitcoin has experienced upside wicks of up to +8%, and it is currently up around +4.5% for the month. This leaves room for the possibility of a price pullback, should BTC fail to decisively break through the resistance.
Market sentiment remains generally positive, with encouraging signals on exchange order books. However, traders have noted a sense of disbelief among some market participants. Despite the ongoing bullish trend, there are lingering doubts that Bitcoin can maintain its upward trajectory.
Meanwhile, the U.S. dollar has staged a remarkable comeback following the avoidance of a government shutdown by Congress. The U.S. dollar index (DXY) currently hovers around 106.7, just 0.2 points below its recent 2023 highs. Analysts speculate that further dollar strength could push it to 108, marking new 11-month highs. This resurgence in the U.S. dollar's value has drawn attention, with potential consequences for multiple financial markets.
Economist Mohamed El-Erian has described the strength of the U.S. dollar as having potential implications for both the U.S. economy, particularly in terms of growth and financial stability, and the broader financial markets. The evolving dynamics in the cryptocurrency market and the resurgence of the U.S. dollar make it a pivotal moment for traders and investors to closely monitor and assess the potential outcomes in the coming days.