The fact that the largest cryptocurrency by market capitalization refrains from a deeper retreat may signal its readiness to make another bull
After peaking at fresh all-time highs just below the $20,000 milestone earlier this week, bitcoin price switched into a corrective mode and has settled in a tight trading range since then. As of writing, BTCUSD was changing hands at $19,222. The fact that the largest cryptocurrency by market capitalization refrains from a deeper retreat may signal its readiness to make another bull run following the current consolidation.
Furthermore, the pair continues to hold above the ascending 20-DMA, today at $18,044, while the daily RSI has corrected lower from the overbought territory but doesn’t give any bearish signals at this stage. The longer-term outlook for bitcoin looks bullish as well, with long-term and institutional investors continue to express rising interest in blockchain and digital assets in general.
In a negative scenario, if the prices fail to stay afloat and a more pronounced correction begins, BTCUSD will first target the $18,900 intermediate support, followed by $18,300 and the $18,000 handle where the mentioned moving average arrives.
Fundamentally, growing inflation concerns globally will likely continue to make investors turn to bitcoin in the longer run.
Furthermore, market players are growing confident that the digital asset is a better store of value and inflation hedge than gold. Of note, at the start of this week, gold prices dipped to four-month lows below $1,1765. The precious metal managed to recover above $1,1840 since then but the correction was mainly due to a widespread sell-off in the US dollar that plunged to April 2018 lows and remains on the defensive on Thursday.
In the immediate term, the BTCUSD pair needs to hold above the $18,900 region in order to refrain from a deeper downside correction. Otherwise, the significant 20-day moving average will come back into market focus. On the upside, the $20,000 continues to act as the key barrier for bitcoin bulls.