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Bitcoin still in a sideways trend and closer to the support level

Bitcoin still in a sideways trend and closer to the support level

created Daniel KosteckiJune 21 2024

This is the second consecutive week of decline in the most popular price kryptowaluty world, which causes the bitcoin price to drop to around USD 63600. This is the level that is more or less in the middle of the consolidation that has been going on for bitcoin since March. Resistance and the upper limit of the sideways trend seem to be located at 71000 and support at USD 59000-60000.

Bitcoin detached from the American stock exchange

It's impossible not to notice that the quotes Bitcoin have definitely broken away from the direction of the American stock indices. Although in the long term the correlation seems to be maintained and is high, the US indices have increased significantly since March, with consolidation on BTC. But has bitcoin started to correlate more strongly with another market?

The fate of bitcoin depends on the dollar exchange rate?

Since March, bitcoin quotations have begun to consolidate in their consolidation with the quotations of the main currency pair EUR/USD. Its exchange rate at that time still fluctuates between 1,09 and 1,0640. The peaks and troughs of the sideways trend are similar EUR / USD and Bitcoin. Therefore, it is possible that BTC quotations may currently depend on the future fate of USD.

The matter would be simple here if it weren't for the elections in France. Data from the US economy are constantly deteriorating, which lowers US yields, and this may lower the USD exchange rate. Nevertheless, this would probably be the case if political uncertainty had not hit the euro exchange rate. As a result, the market reaction to EUR/USD and, due to the currently dominant correlation, also to BTCUSD may depend on what the French choose.

Risky assets like low yields and a weak dollar

From the point of view of the entire recent Bitcoin boom, it seems that the last piece of the puzzle is missing, which may appear in the coming quarter. Namely, we are talking about lower profitability US bonds and with a lower USD exchange rate (looking at the USD index). If these two elements appear in the next quarter, bitcoin may not have said the last word yet and it will probably be able to cross the USD 4 barrier that has been expected for 100 years by October this year.

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About the Author
Daniel Kostecki
Chief Analyst of CMC Markets Polska. Privately on the capital market since 2007, and on the Forex market since 2010.