A crypto renaissance sees Bitcoin price challenge major resistance and long-term trendlines in a much-needed show of strength.
Bitcoin (BTC) took aim at $24,000 on July 20 after a night of solid gains put bulls in the driving seat.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
Against expectations, crypto staged a recovery beyond an intra-hour “fake-out” as risk assets benefitted from declining U.S. dollar strength.
The inverse correlation between the U.S. dollar index (DXY) and Bitcoin remained center stage on the day, with the greenback coming off twenty-year highs at the end of the week prior.
U.S. dollar index (DXY) vs. BTC/USD 1-day candle chart. Source: TradingView
“The Dollar is taking a nice hit today from the bears,” popular trader Crypto Tony told Twitter followers as the breakout took shape.
“Good sign for Bitcoin as things cool off for the DXY.”
$DXY has broken the Parabolic Trend (Parabola) that has been formed since Jan 7, 2021.
It’s time to pay attention. pic.twitter.com/xg344NrOCw
— wolf (@ImNotTheWolf) July 19, 2022
Fellow analyst Wolf meanwhile eyed the breakdown of a “parabolic trend” in place on DXY throughout 2022. At the same time, as per analysis from popular trader Jibon, BTC/USD had ended its parabolic run to macro lows.
— Trader_J (@Trader_Jibon) July 20, 2022
Those “expectations” referred to a strategy forecasting BTC/USD rising to $40,000 before another bearish phase puts in a fresh macro bottom.
Major trendlines see a sudden test
Returning to current price action, meanwhile, significance came in the form of crucial trendlines being broken.
Among them were the 200-week moving average (WMA) at $22,800 and Bitcoin’s realized price at $21,934 as of July 19, data from on-chain analytics firm Glassnode confirmed.
Bitcoin realized price chart. Source: Glassnode
Both are classic fixtures in Bitcoin bear markets, with BTC/USD usually wicking below while preserving the levels as basic support.
Attention thus focused on the weekly close, which would confirm a breakout from the 200 WMA.
Hard to believe but #bitcoin has broken the 50 DMA, 200 WMA (confirms week close), major upward resistance, & Bear Flag all in the same day.
— Roman (@Roman_Trading) July 19, 2022
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