At 22.49 percent higher, Bitcoin recorded its best week since April 2019.
The cryptocurrency benchmark soared to an all-time high of $ 24,300, up 22. as traders assessed its growing prominence as an emerging safe haven alternative among institutional investors. The sentimental shift towards Bitcoin occurred as some of the most traditional hedge assets reflect a medium-term bearish outlook. That included the US dollar.
Factors including Brexit optimism, the introduction of the coronavirus vaccine, the US Federal Reserve’s dovish outlook, and its hopes for a new US stimulus bill continued to lower the greenery. Reflecting its weakness, the US dollar index, which tracks dollar performance against a basket of foreign currencies, slipped below 90 for the first time since April 2018.
Many traders raised their bids for Bitcoin in anticipation of the dollar’s value falling further in the medium term.
They are treating the cryptocurrency as an anti-fiat asset, given its accurate negative correlation with the blueprint since the March 2020 global market path. The US dollar index, on the other hand, has fallen up to 12.68 percent.
Following its final meeting in 2020 on Wednesday, committee chairman Jerome Powell committed to continuing their bond buying program. Meanwhile, U.S. Congressional leaders reached a deal on their $ 900 billion stimulus package. They both add more bearish pressure on the US dollar heading into the new week.
That, in turn, could spur Bitcoin traders to – at least – hold earnings above recently established daily support levels above $ 23,000.
Detailed Bitcoin Preview
Fundamentally, the new week looks pretty at macroeconomic levels. There are no significant events and data releases on the economic calendar that could influence the average Bitcoin trader to go significantly long / short on his trade. The coming Christmas holiday season is also likely to keep most “whales” busy.
But technically, Bitcoin can try to correct its “over-thinking” levels, as evidenced by its weekly Relative Strength Indicator. Currently, the level is near 88, which reflects an overheated market. First short-term support is nearly $ 23,318. Breaking below that level would get Bitcoin tested on the following support (consecutively): $ 22,329, $ 21,252, and $ 20,000.
Meanwhile, the prospect of more dollar declines – especially on the stimulating news – could get Bitcoin RSI to climb further into the over-thought territory. That would mean another re-enactment of its highest ever, and then the possibility of touching ever more highs into uncharted territory.