Bitcoin price is back above the critical zone of $19,000 after plummeting below it on Tuesday. In fact, earlier on Wednesday, it dropped to a level last seen in mid-June. As at the time of writing, BTC/USD was at $19,144.80; up by 1.87%. A strong US dollar and decline in the stock market are the key bearish drivers in the crypto market.
Fundamentals
An ultra-hawkish Federal Reserve and environment of high interest rates has continued to weigh on Bitcoin price and the broader class of risk assets while strengthening the US dollar. In fact, the dollar index rose to a fresh 20-year high of $$110.81 earlier on Wednesday. Recent data showed an expansion of the US service sector; an aspect that signalled some economic recovery.
In the ensuing sessions, investors’ focus is set to shift to the US CPI data that is scheduled for release next week. The inflation figures will offer some clues on the Fed’s move during its policy meeting later in the month. Investors expect a rate increase of 75 basis points; the third super-sized hike in a row.
Besides, Bitcoin price and the broader class of cryptocurrencies tend to move in tandem with the US stock market. On Tuesday, the tech-heavy NASDAQ 100 index dropped below $12,000 for the first time since mid-July. It has since rebounded to $12,261.99 as at the time of writing. Indeed, the bounceback has boosted Bitcoin price back above the psychologically crucial level of $19,000.
Bitcoin price prediction
BTC/USD bounced back above 19,000 on Wednesday after the plunge recorded on Tuesday. As shown on its four-hour chart, the crypto is still trading below the 25 and 50-day exponential moving averages. Prior to Tuesday, the critical level of 19,500 was a steady support zone since mid-July.
Based on both the fundamental and technical indicators, the aforementioned level, which is along the 25-day EMA, may remain a key resistance level in the short term. Indeed, a move above that level will invalidate this bearish thesis.
In the ensuing session, 19,000 will remain a level worth watching in the second half of the week. A pullback may give the bears an opportunity to retest June’s low of 18,500.
