Bitcoin showed some strength during today’s trading session after revisiting the bottom of an important trend line. The benchmark crypto traded in a tight range, between $18,600 and $19,500, but the monthly close could support a spike in volatility as bulls and bears fight for this candle.
At the time of writing, Bitcoin (BTC) is trading at $19,400 with a 2% gain in the last 24 hours and 7 days. Other cryptocurrencies seem to be the next Bitcoin as they register small profits in low time frames. The benchmark crypto could be gearing up for further gains.
Is Bitcoin Setting The Stage For More Profits?
In addition to the monthly close, Bitcoin’s recent price action appears to be supported by a crash in the US dollar. The coin was able to reach levels last seen in the early 2000s, as it touched 115 on the DXY Index, but it was rejected from these levels.
At the time of writing, the DXY Index is trading at 112 and may return to its early September lows well south. The rally in the DXY Index was one of the main obstacles limiting the upside in Bitcoin and other risky assets, such as stocks.
In this sense, a review of the September lows may allow the crypto market to extend its current bullish price action over the coming weeks. According to analyst Justin Bennett, the price action of the DXY Index could support a Bitcoin rally back to $26,000.
The cryptocurrency could reach this level before the next meeting of the Federal Open Market Committee of the US Federal Reserve (FOMC). As seen in the chart below, Bennett claims that Bitcoin was trading in a channel with a bottom around $18,700 and a top at $27,000.
With US dollars trading to the downside, Bitcoin could reclaim the high of this channel. The analyst wrote: “As long as $18,700 holds, this is my Bitcoin playbook until October”.
Bitcoin On A Lighter “Bear Market”?
Additional data from a pseudonymous analyst indicates that Bitcoin could be in for lighter bearish price action. The analyst looked at the previous decline in the price of BTC from its all-time highs (ATH) and discovered that the cryptocurrency is only 74% of those levels.
In the bear markets of 2013 and 2017, Bitcoin crashed 84% from its previous all-time high and in 2011, 93%. This could suggest that a BTC bear market is weakening or that the cryptocurrency could see another leg down.
In addition, the analyst discovered that Bitcoin spent 316 days away from its all-time high. In previous years, the cryptocurrency is able to find a bottom on average 312 days after crashing from its ATH. In that sense, the analyst concluded:
The length of 316 days in a current bear market so far is between 2011 and 2013 + 2017. Either, we are bottoming out soon or this time is different. The average up-down duration is also very interesting. The average is 312 days, which is #Bitcoin now.