Bitcoin (BTC) starts a new week in familiar territory — crucial support is back, but bulls have not yet got their breakout. Could that soon change?
After reclaiming $33,000 on Friday, BTC/USD has held on to the trading corridor it had been in before last week’s brief volatility.
That involved a dip to $32,000 on the back of sudden short positions accumulating on exchange Bitfinex.
The impact was only temporary, however, and the weekend saw highs of $34,600 on Bitstamp.
Cointelegraph presents five factors to consider when eyeing what Bitcoin might do next.
Stocks boom as USD hits classic resistance
With stocks going upward as usual, there seems to be little in terms of friction that could cause problems for cryptocurrency gains.
While analysts are increasingly warning about a comedown in the future, the mood in equities remains firmly buoyant this week.
“There does seem to be a complacency that Goldilocks is not only alive and well, but that it’s getting stronger by the day,” Simon Ballard, chief economist at First Abu Dhabi Bank, told Bloomberg.
“Unfortunately, it has to be recognized that going forward, the longer that rates remain where they are, the more that we look toward tapering, the more severe and acute could be the reaction.”
The United States dollar, however, could provide more clues.
Taking a look at the U.S. dollar currency index (DXY), which measures USD strength against a basket of 20 trading partner currencies, the picture shows some familiar resistance is back in play.
Late last week, one analyst argued that DXY needed to rise from its current 92.2 to around 94 in order to see major resistance kick in, which would boost Bitcoin.
On Monday, however, DXY is still recovering from losses it incurred at the end of the week, also battling a zone that has kept it in check in the past.
Bitcoin’s inverse correlation to DXY has also been placed under the microscope recently, as BTC increasingly forges its own path within the macro environment.