Bitcoin (BTC) starts a new trading week with about 5% off the legendary price level of $ 20,000 – but can it hit it this time?

As the largest cryptocurrency lined up for another opportunity to overcome fundamental resistance, Cointelegraph looks at market factors affecting Monday’s price development.

Vaccine, stimulus solution gives appetite for risk
At a broader macro level, the conversation is largely focused on getting the US to accept a stimulus package against coronavirus this week.

This is an important test of the dollar’s strength, a government official told mainstream media. He has “no guarantee” that the negotiations will succeed, but the value of the package under discussion is about 900 billion dollars.

As reported by the Cointelegraph, this will include benefits for various sectors of the economy, but will not definitely include a second motivation exam for the average American.

The prospect of a stimulus package and vaccine rollout helped support the falling dollar, but is currently recovering risky assets.

These include stocks as the Japanese market crossed a two-year high in early Monday. Oil is also recovering, close to $ 47 a barrel, in the hope that the vaccine will spur new demand.

Dynamics of BTC / USD at the moment. Source: data on digital assets.
For Bitcoin, however, a significant strengthening of the US dollar is always a concern – 2020 was marked by an inverse relationship between BTC and the US Dollar Index (DXY).

In press time, however, DXY has retreated 91 points again, still not far from the lowest level since April 2018.

New recommendations from the US Federal Reserve on the economic response to the virus will also be released this week, and the dollar is likely to move step by step with major updates.

BTC returns to critical resistance
Inside Bitcoin, the weekend continued with the relatively recent price action phenomenon that occurred more often on Saturdays and Sundays than on weekdays.

After five days of weak trading, the BTC / USD pair rose from almost $ 18,000 to the highest of $ 19,400 after Friday.

This move is obvious as new advances lead to a new round of confidence votes from various well-known investors.

Bitcoin is quietly moving above $ 19,000. It does not matter. You can not see anything here, “Gemini co-founder Cameron Winklewos summed up on Sunday.

At the time of the press, the BTC / USD pair was trading in a circle around $ 19,150 after the rally was stopped at the beginning of the $ 19,400 overhead resistance. The level is critical as it coincides with the final sales pressure in the $ 600 window ending at $ 20,000.

An earlier attempt to raise $ 20,000 quickly failed, leading to last week’s lowest value of $ 17,550. A look at the trade order data reveals that the sales bids are in the same place. Conversely, if $ 20,000 is finally overcome, resistance will remain weak at $ 22,000 – currently the latest price barrier for bitcoin.

Michael Van de Pope, an analyst at Cointelegraph Markets, added: “We see another high hit, making it highly likely that we will hit a new full-time position in the coming weeks if there is a gap between $ 19,400 and $ 19,500. “in Sunday’s update.

Traders should be aware, however, that there is a possibility of a “phantom outbreak” over this latest rally, resulting in a bearish deviation and further range that is likely to continue.

Another $ 1,000 Futures Hole joins the party
Meanwhile, in the face of hopes of a $ 20,000 settlement, the weekend has created another hole in the bitcoin futures markets, leading to downward pressure.

About $ 1,000 in volume, the difference between late Friday and early Monday in CME bitcoin futures markets gives a lower target price of $ 18,100.

As previously mentioned by the Cointelegraph, these “holes” traditionally closed shortly after they appeared, but now the size of the holes has become difficult. The previous $ 1,300 gap, almost unparalleled in size, closed only half of it with a range of up to $ 17,550.

Forex trader Justin Bennett, founder of DailyPriceAction, said of the gap: “Keep in mind that $ BTC may need to close the $ 16,925 CME futures gap before we see all-time highs.”

In an analysis for the Cointelegraph, Van de Pope similarly highlighted gaps as an ongoing phenomenon that needs to be monitored.

A new gap will be created at CME because the latest closing price is $ 18,115. Thus, this future break will probably be an important entrance or starting point, so such breaks often become a self-fulfilling prophecy that is fulfilled, he also emphasized.

Source: CoinTelegraph