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Bitcoin prices finished the last week slightly higher despite a rebound in the US dollar. The flagship cryptocurrency ended 2.63 percent higher on the COINBASE exchange for the week.
Meanwhile, the new weekly session began on a positive outlook. Bitcoin was up 1.47 percent, trading slightly above its short-term support level of the 20-day exponential moving average of $33,461. With no big events in view for the next five days, the cryptocurrency anticipates trading on emotions led by long-term fundamentals and short-term technicals.
Except there is just one catch: the ongoing chaos on Wall Street.
Bullish Dollar, Conflicted Bitcoin
The last two weeks saw day traders mobilizing other day traders to purchase several stocks, mostly notably GameStop and AMC Entertainment, that were heavily shorted by rich hedge funds in the US. The retail-led, revenge-buying frenzy led large investment firms to close their bearish positions at heavy losses.
That helped the US dollar log a rebound, limiting gains in the riskier safe-haven markets, including Bitcoin. Nevertheless, on Thursday, the cryptocurrency surged 10.14 percent to $34,000, followed by another upside push towards $39,000 in the next daily session.
Bitcoin trades inside a bullish Rising Wedge technical structure. Source: BTCUSD on TradingView.com
So it appears, Bitcoin’s surge coincided with Robinhood halting GameStop and AMC stock trading on its platform. It also followed Elon Musk’s open endorsement of the cryptocurrency on its Twitter bio, which, as many analysts said, was a metaphorical response to big firms stopping small traders from betting in a free market.
“In retrospect, it was inevitable,” Mr. Musk tweeted.
Meanwhile, day traders attempted to capitalize on the Wall Street chaos in the cryptocurrency sector by asking communities to push the Dogecoin price higher. At one point in time, the DOGE/USD exchange rate rose almost 1,300 percent higher on the BINANCE exchange.
This week, the frenzy is looking to do the same in the silver markets. That has forced some traders to cover their short positions in the white metal’s mining shares and exchange-traded funds. Their losses, coupled with the Federal Reserve’s warning about a slower-than-expected growth in the US economy, expect to further push the dollar’s safe-haven appeal.
US dollar index rises as demand for safe-haven increases amid the Wall Street frenzy. Source: DXY on TradingView.com
That, in turn, could keep Bitcoin from logging maximum gains.
Frenzy Ahead?
Mr. Musk’s endorsement provides Bitcoin a concrete price floor above $30,000. Meanwhile, one cannot reject the possibilities of day traders’ army attempting to manipulate other cryptocurrencies into growing higher, as they did with Dogecoin. The question remains: will the frenzy hit the Bitcoin market, sooner or later?
A push above the Falling Wedge resistance trendline, supported by an increase in volume, could have traders view short-term upside targets above $40,000. A further push and Bitcoin could reach another all-time high by crossing over $41,986.