Bitcoin Corrects 17%, But Market Expects Fresh Rally Report Says

Bitcoin trades in the red these days, and could be heading for more losses. Bitcoin lost a lot of its August profits and may retest support around $20,000.

Bitcoin (BTC), which trades at $21,200, has seen sideways movements over the last 24 hours and an 13% correction over week. As the crypto market seems to be hanging in the balance, all market participants will closely monitor these levels.

BTC’s price moving sideways on the daily chart. Source: View Tradingview BTCUSDT

All eyes will be on the U.S. Dollar, measured using the DXY Index. It fell from its yearly high at 100, and has since entered a phase of accumulation and price movement.

As the U.S.dollar approaches 110 and targets 120, bulls seek to recover levels they last saw at the start of the millennium. Analyst Will Clemente saysHere are some thoughts on the U.S. dollars and their potential to surpass that mark, and further profit:

DXY screaming higher – can’t even draw a proper parabola looks too ridiculous

Bitcoin DXY Index 1
DXY Index tends to the upside according to the monthly chart. Source: William Clemente via twitter

NewsBTC has been following the DXY’s price action in the past week as Bitcoin and the crypto market seem to be negatively correlated with the currency. The crypto market may retrace if the dollar trends upwards.

Justin Bennett, analyst, believes that crypto bulls could be in trouble short-term if DXY Index moves above the areas of 108.70 & 109.30. Bitcoin is nearing a critical resistance level on this latter level, which may provide some relief for Bitcoin if it is rejected once more. Bennett added:

There is some hope this week for risk assets as the $DXY approaches a substantial area of 108.70 to 109.30. There is a possibility of USD weakness, which may provide temporary relief to stocks and crypto. Cue the calls for a DXY double top, which won’t age well, in my opinion.

Bulls and Bitcoin Positioning for More Gains

Trading firm QCP Capital has outlined the possibility of a rally in relief after the U.S. Dollar is removed from its key trendline. claimsThe bullish momentum is expected to return for crypto market participants. Over the last week, Bitcoin has seen a total of 17.7%, while Ethereum saw a 25% decline.

However, the market has not been dissuaded from adopting bullish views by those who have made this observation. QCP Capital noticed “continued interest to buy topside” calls options contracts and “also interest in to sell downside”.

Federal Reserve representatives from the United States will be giving a speech Friday to confirm that they are taking a more conservative approach to monetary policy. This could support Bitcoin and Ethereum’s price bullish momentum as the industry prepares for “The Merge”.

This event will complete Ethereum’s transition as a Proof-of-Stake (PoS) consensus and has created a lot of hype in the crypto market. In the short term, QCP Capital said: “we continue to expect the markets to trade sideways in the near term”.

Get more Crypto News at CFX Magazine