Bitcoin recorded a significant positive divergence early Monday, following seven days of trading below $30,000. The crypto is trading at $30,536.93 at press time, a decrease of 2.5 percent from the previous week, according to Coingecko data.
In the preceding 24 hours, the worldwide cryptocurrency market capitalization increased by almost 2 percent, reaching nearly $1.3 trillion. However, the total trading volume of cryptocurrencies was up by more than 28 percent to $62.13 billion.
Bitcoin’s recent struggles have been caused by the U.S. Federal Reserve raising interest rates. However, inflation has continued to rise which has raised the possibility of further tightening.
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Bitcoin No Longer A Hedge Vs. Inflation?
Bitcoin was once a popular hedge against inflation. But, in recent months, it has become closely associated with other risk assets like the Nasdaq 100. This has declined in response to greater market volatility.
Over the past 10 days, Bitcoin’s price has been trading flat, consolidating around $30,000. Bitcoin might find it hard to recover its former glory as investors seem to avoid riskier assets due to the current inflationary environment.
Edul Patel, Mudrex CEO and Co-Founder:
“Despite a nearly 3 percent increase over the past 24 hours, Bitcoin was unable to breach the US$30,000 threshold. Over the last week, Bitcoin’s price remained unchanged, as it struggled to move beyond its support.”
Dow Jones Industrial Average has fallen for eight weeks straight, while major indexes are following its lead.
As the S&P 500 declined, a strong correlation between it and the crypto markets became clear. Darshan Bathija CEO, Co-Founder, Vauld, said that BTC closed the week at $30,000, marking its seventh consecutive week in red.
BTC market capitalization at $578 billion according to the daily chart. Source: TradingView.com| Source: TradingView.com
Lark Davis, a popular crypto analyst writes:
“Bitcoin is exhibiting a massive bullish divergence on a daily scale. Similar events have not occurred since 2021. Could this portend a massive rally?”
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Crucial Next Two Weeks For BTC
Genesis Global Trading’s Noelle Acheson and Konrad Laesser said in a Saturday note that the price of Bitcoin will likely fluctuate between $29,000 and $31,000 over the next two weeks.
Some economic-data releases, such as U.S. gross domestic product (GDP) or inflation figures, “may alter the narrative,” according to Acheson and Laesser.
According to analysts at WazirX Trade Desk, BTC’s monthly trend has broken below the ascending channel pattern.
Currently, BTC’s next resistance level is expected to be at $40,000 while $24,000 is the closest level of support.
Bitcoin’s monthly relative strength index is currently at 47, its lowest level in more than two years. Analysts have determined that 43 is the support level for RSI.
Featured Image from Al Bawaba. Chart by TradingView.com