Bitcoin (BTC) has been relatively calm during the weekend as crypto traders try to rebuild the markets after the Terra LUNA debacle. With macro factors not supportive, several analysts expect the recovery to be a slow grind.
Crypto research firm Delphi Digital said in a recent report that the rally in the United States dollar index (DXY) had pushed its 14-month relative strength index “above 70 for the first time since its late 2014 to 2016 run up.”
Historically, 11 out of 14 such instances had resulted in the DXY rising about 5.7% over the following 12 months. If the inverse correlation between the DXY and Bitcoin remains intact, that could spell trouble for crypto investors.
Arthur Hayes, the former CEO of crypto derivatives platform BitMEX, said in his latest blog post that the crypto markets “must be allowed time to heal” after the bloodbath. He said that if Bitcoin drops to $20,000 and Ether (ETH) to $1,300, he would turn into a buyer.
Although crypto markets are in a downtrend, periodic bear market rallies could offer short-term trading opportunities. Let’s study the charts of the top-5 cryptocurrencies that may bounce if the sentiment improves.
Bitcoin attempted a strong bounce on May 13 but the long wick on the day’s candlestick suggests that bears are in no mood to let go of their advantage. However, a minor positive is that the bears have not been able to sustain the price below the crucial support at $28,805.
The recovery could hit a hurdle at the 38.2% Fibonacci retracement level at $31,721 and again at the 20-day exponential moving average (EMA)($33,985).
If the price turns down from either resistance, the bears will fancy their chances and try to sink the BTC/USDT pair below $26,700. If they manage to do that,
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