- BTC/USD pair recovered from bearish depths along with US and European stocks.
- Easing concerns about a potential debt default by Evergrande fuelled the rally.
- Federal Reserve’s tapering decision and potential interest rate hike in 2022 didnt affect markets.
- Bulls must close above $46,441 for Bitcoin to resume a sustained rally.
JAIPUR (CoinChapter.com) – Bitcoin rose 10% to reverse a downtrend that pushed down BTC/USD prices below $40,000. The benchmark cryptocurrency rally came as equity markets ticked up amid diminishing debt default concerns by Chinese real estate giant Evergrande.
ON THURSDAY, the BTC/USD pair resumed its uptrend from the lows near $40,513 to log a sessional high at $44,860. Bitcoin rallied in tandem with stocks. The correlation between the two risk-on asset classes played out even after the recent Evergrande-led selloff.
Related: Growing Bitcoin US stocks correlation amid Evergrande selloff disputes BTC’s digital gold narrative
“European stock markets are hitting new ATH’s, almost.
Earlier this week; the big crisis has started with #Evergrande.
Now; we’re back on the road, continue the party.
Simple with #Bitcoin too.
How fast sentiment can flip/flop.”
said Amsterdam-based crypto trader and analyst Micahel Van de Poppe
Assurance by the Chinese real estate developer about clearance on payments on a bond held by local banks allayed defaulting fears. Plus, Bitcoin and the aggregated crypto market also gained due to the reducing strength of the US dollar. As a result, the DXY index, which measures the greenback’s strength against a basket of other prominent fiat currencies, slipped from 93.52 to 92.98.
Also, Bitcoin daytraders nonchalantly digested the US Federal Reserve’s monetary policy tightening decision.
Fed Is Hawkish, But Market Is Bullish
In November, the Federal Reserve will announce the much-awaited tapering of its $120 billion worth of asset purchases. Fed chair Jerome Powell confirmed the same in the recently concluded Federal Open Market Committee (FOMC) meeting. However, he said that the taper will be gradual, hinting at a complete withdrawal of the monetary stimulus by June 2022.
With the tapering discussions came projections for potential hikes of benchmark interest rates as early as next year. Moreover, an additional federal funds rate increase would take place in 2023. But bullish Bitcoin and stock investors absorbed the updates coming from the latest FOMC meeting. Taper talks have been going around for some time, and markets seemed impervious to its projected bearish effects.
Related: Could Fed tapering cause a massive crypto market crash? The dollar answers
In other words, analysts and market participants took a bullish stance on the ongoing macroeconomic developments.
” #Bitcoin technical update: Nearing the end of another volatile, red September… as expected.
Macro: Bullish
To news: Neutral
On-chain: Neutral Opinion:
Wave of short-term selling–from traders who believe the 2021 bull market is over–is nearing an end. Then onwards & upwards!”
noted Dr. Jeff Ross, Founder/CEO Vailshire Capital Management LLC & Vailshire Partners LP
Bitcoin Technical Setup
The BTC/USD pair formed a Descending Channel pattern since the fall from the $52,852 local high. Bitcoin tested the upper and lower trendline of the said technical setup multiple times. The latest rebound led to the BTC/USD pair retesting $44,431.
However, for the bullish momentum to continue, Bitcoin bulls must manage a close above $46,429 as per the setup shown below.
Relative strength index (RSI) numbers showed a momentum transition from the oversold region. Buying bids stacked up as RSI trended around 52, indicating a green playing field for bulls. After $46,429, a close above $48,651 would set the course straight for the run towards $52,582.
