After a brief period of volatility, Bitcoin (BTC) returned to trade in the green on April 28; one crypto market analyst believes that the possibilities of an upward breakout for the flagship digital asset are growing day by day as the U.S. Dollar gains strength.
Upon further examination of the Bitcoin price action, crypto trading expert Michaël van de Poppe identified one possible cause for the cryptocurrency’s current choppy state, which is that the U.S. Dollar correlation with BTC is particularly strong at this time.
According to Poppe, because Jerome Powell mentioned rate hikes a few weeks ago, the price action of Bitcoin resulted in a downward trend along with equities and indices. Now, the analyst considers the dollar is going to move by 50 basis points (BPS) with the rate hikes next week.
”I assume that it’s going to be a scenario where we buy the rumor and sell the news. I think that close to that event or maybe in the coming few days the U.S. dollar is going to top out and then start to correct from there because the event is already priced in. Then we get into a new neutral situation in which risk-on assets will continue to do well,” he said.
“Since Bitcoin has been peaking since May the dollar has been showing strength and altcoins have been dying down. Bitcoin has been seeing some tests since then too but overall trending sound now what’s the point here is that we’re accelerating heavily to the upside. We are also getting into figures where the indicators are showing extensive run to the upside with the RSI going there.”
Bitcoin price movement
The fact that Bitcoin has been taking liquidity above highs on the U.S. Dollar Index (DXY) and that its Relative Strength Index (RSI) is so high on the DXY at this moment indicates that this is the only asset to look at at this point in time, according to Poppe.
Regarding what the analyst identifies as crucial levels to maintain as the support, he added:
“I clearly want to see it sustain above $39,000. If that is going to be the case and we have that flip taking place here we most likely take out this high and then we can start attacking 43k which is lining up with the dollar showing weakness.”
Presently, Bitcoin is trading at $38,991, up 0.72% in the last 24 hours down 8.28% in the last week, as per data from CoinMarketCap.
Finally, Poppe is not the only one who thinks that the price of BTC will climb over the next few weeks as the crypto community, with 83% historical accuracy has set a bullish Bitcoin price for May 31, 2022.
Watch the video: Bitcoin preparing for a breakout
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