Last week was a critical period for risk markets, yet the expected period of high volatility did not return. The Federal Reserve reinforced its hawkish stance, which had a negative impact on the price of BTC. Although the MtGox announcement led to a temporary recovery, it was not sustainable. So, what does the current outlook indicate?
Dollar Index Analysis
The dollar index (DXY) has an inverse correlation with BTC. If the dollar strengthens against other currencies, it means a decrease in the price of BTC. Recently, DXY has been steadily rising. In fact, it has climbed to the March 2023 peak in a short period of time. This situation has largely supported the negative performance in the crypto market that has been ongoing for about 6 weeks.
The index, which rebounded from the 20-day EMA (104.85) on September 20, has once again risen above the 106 level. This area has the potential to act as resistance, but we do not see it yet. If the upward movement continues, 108 will be the next stop. However, closings below 104.4 will reverse the direction again. For now, the rise continues, which is against the cryptocurrency.
Bitcoin (BTC) Chart Analysis
The formation that occurred on the 22nd and 23rd on the daily chart indicated a downturn. The expected happened and the price broke down on September 24. There are many details that motivate sellers, and the $24,800 region is their strongest target. If the BTC price falls back into this area, we may see another wave of extreme selling that will last until $20,000.
Time is running out for the bulls. If they want to start a meaningful recovery, they will need to push the price above the moving averages. If successful, we may see a test of the $28,143 resistance area.
In summary, based on oil, DXY, and BTC readings, we can say that the expected crypto rally is not imminent. At least, this is the situation from a technical perspective.
Ethereum (ETH) Chart Analysis
Ether price is slowly moving towards the $1,531 support level. This weakness can be considered normal as the bulls’ energy is depleted. The declining moving averages also offer a reading in favor of sellers. The RSI has started to recover weakly, which may indicate that sellers are also weakening.
The goal for the bulls is to close above the 20-day EMA level of $1,616. If successful, we may see a recovery up to $1,746. However, the support levels of $1,531 and $1,368 remain intact in the opposite scenario.
