Bitcoin (BTC) price has shown impressive strength in previous weeks, and today the price has reached a new high for 2020 at $ 13,666.
This momentum came with the weakening US dollar, and many analysts believe that as long as the dollar remains weak, Bitcoin and other safe-haven assets will do well.
However, given the demonstration of Bitcoin’s power, the altcoins were unable to follow suit and sell most of the altcoins for BTC. Bitcoin’s dominance has increased in recent weeks and this indicates that market dynamics are dependent on Bitcoin.
The weekly chart shows a clear resistance range between $ 13,500 and $ 14,250 as the next major setback for the markets.
Bitcoin price broke the $ 11,600-12,000 barrier as a decisive barrier for further upward movement. The violation resulted in the price continuing to rise to the next level, ranging from $ 13,500 to $ 14,250.
It is unlikely that a clear breakout should be expected right away, as this is the first test of this resistance zone, but the overall weakness of the dollar indicates that the price of bitcoin can only rise.
The US Dollar Index (DXY) is showing significant weakness after the last 94.6 point test was immediately rejected.
This deviation caused even more DXY dropdown. Most importantly, after the refusal on September 24, the price of bitcoin began to rise.
This rally pushed the bitcoin price up by $ 3,000, from $ 10,500 to $ 13,500. The correlation between DXY and Bitcoin has increased since the March crash, and this is an inverse correlation.
If the dollar maintains the 92.50 level, it could also cause Bitcoin to reverse. This could mean a correction in the cryptocurrency markets and it is not bearish at all.
Crypto market chart for the week. Source: TradingView
The total market value of cryptocurrencies depends on the strength of bitcoins, as only BTC has been showing strength lately. This means that altcoins are selling their BTC pairs, indicating that Bitcoin is currently stronger than altcoins.
Currently, the total market value is in a huge resistance zone with a critical focus of $ 400-410 billion.
A breach of this resistance zone means that the probability of occurrence remains between $ 520 billion and $ 530 billion.
Failure here could mean additional, overarching coverage, where areas of $ 280-300 billion would be a significant area of support to be held.
The main focus for Bitcoin at the moment is whether it can hold the support range from $ 13,000 to $ 13,200. If this range requires support, the recent eruption cannot be classified as a deviation from this bullish range.
However, if the bitcoin price exceeds $ 13,500 and returns to that range again, the divergence is confirmed by a new test of the bearish $ 13,000-13,200 range.
If this scenario works correctly, there will be a new test at the tables for $ 12,500 and possibly $ 12,000 or $ 11,600.
Clearly, such a move is consistent with a possible reversal of the US Dollar Index and Bitcoin’s failure to surpass $ 14,000.
Again, this retest is not bearish. Before continuing the trend, it is useful to check the previous resistance levels for support.