Bloomberg Intelligence senior macro strategist Mike McGlone highlighted that “risk assets typically rise and fall on the back of liquidity.” The central banks have been withdrawing liquidity to control surging inflation, which has resulted in a fall in money supply and commercial bank deposits.
Therefore Bloomberg Intelligence believes it is “illogical” to expect the stock market, crude oil and cryptocurrencies to sustain recent bounces. Usually, rallies from bear market lows continue until the last bearish trader throws in the towel and turns bullish. Until that happens, the rally in Bitcoin may continue to frustrate traders who expect the price to turn down once again.
We said in our previous analysis that the tightrange trading may not continue for long and the indicators showed that bulls were in command. We also mentioned that if $29,190 is broken out, Bitcoin may scale above $30,000 and that is exactly how it has been. The BTC/USD pair rebounded off the 20-day exponential moving average (EMA) on April 9 and surged above $30,000 on April 11. This sharp up-move pushed the relative strength index (RSI) into the overbought zone.
Buyers will try to sustain the momentum and push the price to the overhead resistance at $32,000. This level is likely to witness aggressive selling by the bears because if $32,000 gets taken out, the rally may reach $40,000. On the downside, the 20-day EMA remains the key support to watch for. In an uptrend, traders generally buy the dip to this level.
The bears will have to sink the price below the 20-day EMA to indicate that the bulls may be losing their grip. The pair may then retest the neckline of the inverse head and shoulders (H&S) pattern. This remains the make-or-break level for the bulls because if this level crumbles, the advantage will tilt in favor of the bears.
Lastly please check out the advancement’s happening in the cryptocurrency world.
Enjoy the issue!
– The House Of Fashion
– ReduX Technologies