Michael van de Popp: Dollar strengthening could lead to healthy Bitcoin correction
Bitcoin hit an annual high above $ 13,600 this Tuesday. Analyst Michael van de Popp believes that the most pressing obstacle to the first cryptocurrency is the resistance of $ 13,500 – 14,250. The previous level of comparable significance was located between $ 11,600 and $ 12,000..
He expects that the resistance will not be overcome immediately, as this is his first test, “however, the general weakness of the dollar signals that the price of bitcoin can only move higher.”.
The DXY, which measures the US dollar against a basket of six major currencies (euro, yen, pound sterling, Canadian dollar, Swedish krona and Swiss franc), showed significant weakness after an instant rejection at 94.6, which was followed by further declines. It is noteworthy that after that the price of bitcoin began to rise.
In the most recent rally, Bitcoin climbed $ 3,000 from $ 10,500 to $ 13,500. The DXY’s inverse correlation with Bitcoin has increased since the March crash. If dollar holds on support at 92.5, bitcoin trend risks reversing, analyst says.
The growth in total market capitalization lags behind bitcoin, as currently only the first cryptocurrency is showing strength, while altcoins are going down with it. Large resistance on the aggregate capitalization chart is located at the level of $ 400-410 billion, and its break will mean the continuation of the uptrend up to $ 520-530 billion. A refusal will imply the preservation of the current range with the lower border at the level of $ 280-300 billion.
The key task for bitcoin is to maintain the support of $ 13,000 – 13,200. Otherwise, the price may return to the levels of $ 12,500, $ 12,000 and $ 11,600. Nevertheless, the analyst is confident that such a correction will not be a bearish signal, but “a very healthy test previous resistance levels before a continuation in an upward direction may occur “.