Bitcoin on the Rise, Eyeing Critical Tech levels as the US Dollar Deflates

BTC/USD Analysis

BTC/USD had slumped last Wednesday to the lowest level in nearly two years (18,137) and concluded the week with losses. The drop came after the Fed raised rates by another 75 basis points, in the most aggressive hike cycle in at least three decades.

The hawkish commentary, the upgraded rate projections and the reignited recession fears led to another US Dollar rally, with pretty much every other asset capitulating to its strength.

Bitcoin however managed to put up a resistance at the start of the current week and stages a relief rally today, as broader sentiment shows improvement and the US Dollar deflates. Most major cryptocurrencies perform well today, with FXCM's CryptoMajor Basket gaining around 4% at the time of writing.

Today's surge carries BTC/USD above 20,000 at critical technical levels, as it tries to take out the 50% Fibonacci of the August High/Low drop and the EMA200, at 20,468-20,540. Daily closes above this level can open the door to a larger recovery towards and beyond the 20,580-21,698 region.

Despite today's impressive rebound, the upside does not look hospitable and we remain cautious around the crypto's ascending prospects, while the Relative Strength Index points to overbought conditions. Below the EMA200, bears remain in the driver's with the ability to set fresh two-year lows towards 17,566, but it may be early to talk for sustained moved towards and below 16,189.

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Nikos Tzabouras

Senior Financial Editorial Writer

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

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