Bitcoin analysts eye weakening US dollar as BTC price fights for $17K
2022.12.04 12:46
Bitcoin (BTC) bulls attempted to retake $17,000 into the Dec. 4 weekly close as volatility looked set to return to the market.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
Bollinger Bands demand BTC pricevolatility
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD crisscrossing the $17,000 mark — a focal point throughout the weekend.
With macro cues still to come, Bitcoin looked for catalysts as signs of volatility crept into low timeframes.
Among those eyeing a potential break of the status quo was popular trader Cheds, who noted that the Bollinger Bands volatility indicator was flashing on the 4-hour chart.
Bollinger Bands constricting signals that volatility is due soon, and on the day, 4-hour chart bands were at their narrowest since Nov. 27 — just before BTC/USD gained $1,000.
BTC/USD 4-hour candle chart (Bitstamp) with Bollinger Bands. Source: TradingView
Fellow trader Crypto Tony meanwhile stayed put on his short-term BTC price theory.
“Simply no change over the last few days,” he told Twitter followers.
“We are grinding more into the EQ / mid range, but i wouldn’t be surprised to see a wick up to form an SFP and back down.”
BTC/USD annotated chart. Source: Crypto Tony/ Twitter
Previously, Crypto Tony flagged $21,500 as a target to aim for if bulls were to take control and change the trend.
U.S. dollar index reverses relief bounce
The coming week meanwhile looked increasingly important for the U.S. dollar and, by extension, risk asset performance.
Related: Bitcoin miner outflow ratio hits 6-month high in new threat to BTC price
Already at its lowest levels in five months, the U.S. dollar index (DXY) looked decidedly bleak at the end of the prior week’s trading.
A bounce to 105.6 on Dec. 2 reversed almost entirely through the day, DXY finishing on 104.5.
For technical analyst Gert van Lagen, it was all part of the plan, with bearish DXY signals apparent even in November.
“Swift bearish continuation would be normal here,” he wrote in analysis on Nov. 23 to which he returned over the weekend.
U.S. dollar index (DXY) 1-hour candle chart. Source: TradingView
“Correction ongoing,” trading resource Stockmoney Lizards added about DXY performance.
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