Bitcoin: Given the strength of Bitcoin (BTC) and other factors, investors are wondering if “buying the dip” is a good strategy. Is Bitcoin at the bottom or is there a ways to go? We have compiled the current analysis…
- 1 Analysts debate whether Bitcoin price has bottomed out
- 2 BTC trades in critical area to set bottoms
- 3 Share this:
AmkNews.com As we reported, the collapse of the Terra ecosystem and its on-chain effect on Bitcoin (BTC), Ethereum (ETH) and altcoin prices caused a tough week for the crypto market after the panic selling after watching the instability of stablecoins. Downside headwinds for the crypto market have continued to be felt since late 2021, as the dollar strengthens and the Fed hints that it will raise interest rates throughout the year. According to a recent report from Delphi Digital, the 14-month RSI for DXY “crossed above 70 for the first time since late 2014 to 2016.”
This is notable because 11 out of 14 cases where this has already occurred “leaded to a 78% stronger dollar over the next 12 months,” suggesting that the pain is likely to get worse for cryptocurrencies. On average, DXY is up roughly 5.7% after the RSI broke above 70, which as of the 13th May reading “will push the DXY Index slightly below 111, its highest since 2002.”
Delphi Digital analysts say:
Assuming the correlation between DXY and BTC is relatively strong, this would not be good news for the crypto market.
Taking a bigger picture approach, BTC is now retesting the 200-week EMA around $26,990, which “historically served as a key area for price dips,” according to Delphi Digital.
Bitcoin also remains above the long-term weekly support range of $28,000 to $30,000, which has proven to be a strong support area throughout the recent market turmoil. While many investors have been panic selling in recent days, Dan Morehead, CEO of Pantera Capital, says he has taken the opposite approach:
It is best to buy when the price is well below the trend. Now is one of those times…Bitcoin has been this “cheap” or cheaper compared to only a 5% trend since December 2010. If you have the emotional and financial resources, go the other way.
However, Delphi Digital notes that “the best deals or “deals” in the market won’t last long. Since BTC has been trading in the $28,000 to $30,000 range for a long time, “the longer we see a price increase in these areas, the more likely it is to continue”. If there are further declines, “weekly structure and volume structure support between $22,000 and $24,000” and “2017 ATH tests between $19,000 and $24,000” are the next major support areas. According to Delphi Digital:
The early signs of surrender are starting to bleed, but we can’t say we’re approaching the maximum pain point yet.
Disclaimer: The articles and articles on AmkNews do not constitute investment advice. AmkNews.com does not recommend buying or selling any cryptocurrencies or digital assets, nor is AmkNews an investment advisor. For this reason, AmkNews and the authors of the articles on the site cannot be held responsible for your investment decisions. Readers should do their own research before taking any action regarding the company, asset or service in this article.