The weakness in the U.S. Dollar Index suggests that risky assets such as Bitcoin and the S&P 500 Index may remain in favor of the buyers. The S&P 500 Index (SPX) rose 2.24% last week, its third consecutive weekly gain. In comparison, Bitcoin managed a minuscule gain of 0.8%, indicating consolidation below $38,000.
The prospects for risky assets remain bullish as the U.S. Dollar Index has started to turn down. Cryptocurrency investors have not parted with their Bitcoin holdings, even after the 125% rally in 2023, indicating their long-term bullish view. Reflexivity co-founder William Clemente posted a chart sourced from Glassnode to X (formerly Twitter), which showed that 70% of Bitcoin in circulation has not been sold or transferred in the past year.
After finding support at the 20-day EMA ($35,925), Bitcoin has been gradually moving up toward the vital resistance at $38,000. The bears have guarded this level twice in the past; hence, they will try to do the same once again. If the price turns down sharply from the overhead resistance and breaks below the 20-day EMA, it may trigger the stops of several short-term traders.
That may start a correction in the BTC/ USDT pair, which could reach $34,000 and subsequently $32,400. Contrarily, if bulls pierce the $38,000 resistance, it will indicate the start of the next leg of the uptrend.
The pair may travel to $40,000, which is again likely to behave as a significant resistance. The rising moving averages and the RSI in the positive territory indicate that the path of least resistance is to the upside.
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