BTC/USD Signal: A Brief Bullish Comeback Can’t be Ruled Out – 27 September 2022
The BTC/USD remained in a tight range as Bitcoin’s correlation with American equities eased. Bitcoin rose slightly to a high of $19,200 even as the Dow Jones index shed another 300 points and the S&P 500 index fell by 60 basis points.
Volatility rises as fear reigns
Bitcoin remained slightly below the important resistance level at $20,000 as global risks and volatility rose. The S&P 500 VIX index rose by 6% to $32 while the US dollar index jumped to $114 for the first time in more than two decades. At the same time, Bitcoin’s fear and greed index remained at the fear zone.
As a result, the prices of most assets have crashed to the lowest level in months. For example, Brent, the global benchmark of crude oil, crashed to $82 while West Texas Intermediate fell to $76.8. Gold dropped from the year-to-date high of over $2,000 to about $1,632. In total, the Bloomberg Commodity Index dropped to the lowest level in months.
Government bonds also continued their steep sell-off as investors anticipated tighter monetary conditions. The yield of the 10-year government bond rose to 3.8% while the 5-year rose to 4.15%. Therefore, Bitcoin has crashed since investors can now get a better yield in safe securities like bonds.
The next key catalyst for the BTC/USD price will be a statement by Jerome Powell. The Fed Chair is expected to reiterate that the Fed was committed to more rate hikes in a bid to fight the elevated consumer and producer price inflation.
The pair will also react to the latest consumer confidence data from the US. With gasoline prices falling, analysts expect that the country’s consumer confidence rose to 104.5 in September. The US will also react to the latest US new home price data.
The four-hour chart shows that the BTC/USD pair found a strong support at 18,538. It has struggled moving below this level several times this month. The pair is consolidating at the 25-day and 50-day moving averages while the Relative Strength Index moved above the neutral point at 50.
Therefore, the pair will likely have a bullish breakout in the coming days as buyers attempt to move above the resistance level at 20,200. A drop below the support level at 18,500 will stop the bullish view.