Higher, before further declines – Markets are experiencing a lull after a bull run back that could be brief…or not. Bitcoin (BTC) is once again trying to regain $30,000. Green is beginning to emerge in the blood-red pool that has flooded BTC markets for the past few days.
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Bitcoin around $30,000: buying dips despite the dollar’s bright color?
Bitcoin price goes up above $31,000 today, May 13, 2022. It is currently trying to hold above $30,000. Bitcoin trades at $30,063 at the time of writing this article. It recorded a daily gain of 4.60%.
Has Bitcoin finally bottomed out, so markets can hope for further upside? Some crypto personalities are calling on investors to buy what could be the lows of this downtrend for bitcoin.
The CEO of Pantera Capital, Dan Morehead, stresses that “It is preferable to buy when the price is well below the trend. This is the case today”.
He justifies such a purchase decision, going against the current trend, by indicating that:
“bitcoin has only been as ‘cheap’ or cheaper relative to trend 5% of the time since December 2010. If you have the emotional and financial resources, go the other way. »
More optimistic forecasts, given the current context, accompany these calls to buy the current bitcoin lows. Trader Michaël van de Poppe shared a chart where he shows that if bitcoin manages to hold above support around $29,700, it would then target $32,800.
But even if the markets hope that the worst is over in the very short term, the coming months of this year 2022 are likely to be bearish for bitcoin.
A report from Delphi Digital looks at the 14-month RSI of the US Dollar (DXY). The latter has ” crossed the 70 mark for the first time since its rise from the end of 2014 to 2016”.
However, historically, such an event led in 11 cases out of 14 to “ to a stronger dollar ~78% of the time over the next 12 months.”
The DXY recorded an increase of 5.7% on average after its RSI broke above the 70 mark. Based on its current value, the index could therefore go up to about 111its highest level since 2002.
If bitcoin continues to exhibit a negative correlation with the US dollar, further declines could thus occur in the BTC markets in the coming months.
So the worst would no longer be to come for bitcoin? At least for now… Barring a mad bull run in the next few days or weeks, 2022 could very well be the year of the bears.
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