The bitcoin bull run seems to continue: Bitcoin rose on Tuesday after falling 8.5 percent in the previous session – showing bullish continuation signs amid global re-risking sentiment.
The benchmark cryptocurrency hit an intraday high above $36,500 and surged 21.35 percent from its previous weekly low of $30,000, with traders flocking back into the market after sensing short-term buying opportunities near the said local bottom.
In the process, they took the BTC/USD exchange rate above a crucial $35,000 resistance level – it capped the pair’s gains during Monday’s U.S. overnight session.
Stocks rally, dollar slips
Bitcoin’s recent upward correction appeared to be almost in sync with similar recoveries in the global stock market. In Asia, the Shanghai Composite Index rose 1.4 percent. Meanwhile, Tokyo’s Nikkei 225 and Hong Kong’s Hang Seng gained 0.1 percent and 0.8 percent, respectively.
The European trading day opened on a positive note, with the pan-European Stoxx 600 up 0.4 percent in early trading and the FTSE 100 Index up 0.18 percent in London. U.S. futures were also positive, pointing to a profitable Tuesday after ending the previous trading day in the red. Gold futures rose 0.34 percent.
At the core of Bitcoin and traditional markets‘ rally was a declining U.S. dollar. The greenback fell 0.24 percent during the early Tuesday session, followed by a modest recovery before the London opening bell.
Technically, the formation of the lower high on the four-hour chart suggests a bearish continuation of the move.
DEr US Dollar Index reverses after testing resistance at 92.
Global financial media reported that investors are weighing an extended dollar rally due to the US election result. The result puts the Joe Biden-led Democratic Party in control of the Senate and paves the way for at least $1 trillion worth of additional stimulus.
„Investors found optimism in the prospect of more fiscal stimulus,“ the Seattle Times quotes Cesar Perez Ruiz, CIO of Pictet Wealth Management. „President-elect Biden has a better chance of pushing through his agenda and delivering much-needed stimulus.“
A bitcoin breakout is expected
A breakout move is expected from the BTC/USD exchange rate as it partially confirms an inverse head-and-shoulders pattern.
Bitcoin trade setup as provided by MM Crypto.
The pattern was first spotted by a pseudonymous analyst and refers to a reversal from bearish to bullish on charts with shorter timeframes. The analyst’s price target is above $40,000, indicating the possibility of another record high (If you’re looking for a way to get in: Go here for buy bitcoins with instant transfer instructions).
„Only if this reversed H&S pattern is confirmed for Bitcoin, we can see a follow-through,“ the analyst said.