The US Dollar Currency Index (DXY) fell sharply after topping 101 on April 20. But this dollar weakness has not helped bitcoin (BTC). That may be because the S&P 500 is struggling to extend its strong April 19 rally. This shows that Bitcoin continues to be highly correlated with the US stock market.
Apart from the lackluster price performance, the forecast bodes well for Bitcoin this year. A report by Insider Intelligence indicates that the number of adult crypto users in the United States could increase from 28.3 million in 2021 to 33.7 million in 2022. In addition to a growing number of crypto users, the company also expects the use of cryptocurrencies for purchases to grow to 3.6 million. That would be 70% growth this year.
The Australian financial regulator’s approval of its first Bitcoin exchange-traded fund, which will go public on April 27, could also boost adoption. The Australian Financial Review expects the fund to attract around $1 billion in inflows.
Will the bears continue to sell on the higher levels of Bitcoin and Altcoins? Let’s look at the charts for that.
BTC/USDT
Bitcoin recovered strongly from $38,536 on April 18. This suggests strong buying at the lower levels. The bulls continue to buy and pushed the price above the 50-day SMA at $42,104.
The 20-day EMA at $41.811 is gradually flattening and the RSI is just below the middle indicating a balance between supply and demand.
This indecision could turn in favor of the bulls if the price rises and holds above the 50-day SMA. This increases the likelihood of a move to $43,900. If the bulls manage to clear this hurdle, the momentum could strengthen and BTC/USDT could rally to the 200-day SMA at $48.052.
However, if the price drops sharply from this level, it will indicate that the bears are selling at the higher levels. The sellers will then try to sink the pair towards the support line of the rising channel.
ETH/USDT
Ether (ETH) slipped below the 50-day SMA at $3,000 on April 18, but the bears failed to hold the lower levels. The bulls bought out the dip and allowed the price to rally above the 50-day SMA.
The buyers managed to push the price above the 20-day EMA at $3,113 on April 20. But the long wick on the daily chart suggests the bears are continuing to sell higher. The bears are currently trying to keep the price below the 20-day EMA.
If successful, ETH/USDT could consolidate in a tight range between $2,883 and $3,166. This narrow trading range is unlikely to last long and could lead to a sharp widening of the range in the coming days.
A break below $2,883 could drop the price to the uptrend line. Conversely, a break above $3,166 could open the door for a retest of the 200-day SMA at $3,491.
LUNA/USDT
Terra LUNA bounced off strong support at $75 and scaled the 20-day EMA at $91 on April 18th. This suggests sentiment remains positive and traders are buying on the dips.
The rally continued on April 19 and buyers were able to push the price above the 50-day SMA at $93. The bulls will attempt to maintain the momentum and carry LUNA/USDT higher to the psychological levels of the US Dollar. If the bulls reach these highs, the likelihood of a retest of all-time highs increases.
If the price declines from the current levels or from $100, the bears will attempt to sink the pair below the 20-day EMA. When successful, it signals traders taking profits on rallies. This could result in a beach that could last for a few days.
In this context: Bitcoin (BTC) and Enter (ETH) set to hit new all-time highs in 2022: Celsius CEO
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and every transaction involves risk. Research well before making a decision.
Market data comes from the crypto exchange HitBTC.
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