Alveena Ahmad
The cryptocurrency market’s primary trendsetter continues to be the price of Bitcoin. After all altcoin prices declined along with Bitcoin yesterday, reaching a low of $29,173, the cryptocurrency market is back in the black today.
As of the time of publication, the price of Bitcoin has once more surpassed the significant resistance level of $29,800. Since yesterday’s low, BTC has increased 2.7%, and it is currently trading back above $29,900. Avalanche (AVAX), Chainlink (LINK), and Arbitrum (ARB) are a few altcoins that are outpacing the upward trend of Bitcoin in terms of price growth.
Why Bitcoin and Crypto Are Up Today
The price adjustment for Bitcoin from yesterday might be viewed as a technical consolidation, as NewsBTC reported. The argument for a continued rally in Bitcoin and the whole crypto market is particularly strong according to the medium-term macroeconomic.
Among other things, the macro data from China may have given today’s surge a boost. China’s GDP expanded at its quickest rate in a year, 4.5%, in the first quarter of 2023, according to information released this morning.
A rise in consumer spending and manufacturing output following the conclusion of “Zero COVID” also explained why the growth was steeper than anticipated. All of the data were positive. In Q1 2023, the Gross Domestic Product (GDP) (YoY) actually increased from the estimated 4.0% to 4.5%.
In March, retail sales increased by 10.6% (YoY), above the forecast of 7.4%. Compared to the estimate of 5.5%, the jobless rate was 5.3%.
It’s also likely that the US dollar index (DXY) gave the move even more momentum. Bitcoin and the DXY have an inverse correlation, so when the DXY declines, Bitcoin typically increases.
The DXY has been experiencing significant pressure over the past few weeks, but on Friday, there has been a small relief rally that helped lift the index from 100,807 to 102,207. The DXY is now once again displaying weakness today, falling to 101,603.
Bitcoin and the DXY: What’s Next?
In light of this, co-founders of Glassnode Jan Happel and Yann Allemann refer to the present movement of Bitcoin as a “shallow correction,” which is a sign of a powerful bull market rally. The analysts contend that there was a chance of a possible decline to $25,000 in price.
But given that Bitcoin has quickly soared to $30k, this has not come to pass. Happel and Allemann write: “This is a very clear indication of the strength of momentum, which will lead to higher prices.”. They also state:
Prior to $47k, we identified $35k as the next significant target. This is still the forecast, and we anticipate substantially higher pricing in the late second and third quarters. But we still need to consider what can happen to Bitcoin if/when DXY swings to 105-107.
Before the end of the year, the two analysts predict that the DXY will be around the 91-93 zone. However, they do anticipate an initial bounce to the upside based on Elliott wave theory:
DXY is anticipated to reach 105.8 or even 107.2 before abruptly rolling over. This configuration would be significantly questioned by a credible drop below 100.
