Bitcoin soared on Wednesday after finding reliable support at $ 10,500. An upward movement emerged when the US dollar index fell below the classical trend line support that emerged in 2011.
By setting new downside targets based on technical parameters, Greenback could further expand Bitcoin earnings as it saw a retest of $ 14,000.
Bitcoin surged during Wednesday’s session because demand for alternative safe-haven assets remained stronger against a underperforming US dollar.
Leading cryptocurrency closed the day at $ 11,756.75 (Coinbase data), up 5%. Its gains followed an upward trend in the gold market, where gold rose further after breaking the $ 2,000 per ounce level. The increase in scarce assets in general has highlighted investor fears about inflation.
Pictet Portfolio’s chief strategist, Luca Paolini, told FT that investors were careful in the stock market after March.
Fear of a major correction also said that investors have referred the investors to seek security in the bond market, which offers the worst return of twenty years.
The US Dollar Is Falling Down
Meanwhile, the recent decline in the US dollar shows that investors do not want to invest their capital in dollars. The reason for this is the Fed’s monetary expansion policy, which is a 2% inflation target, and the trillions of dollars incentive package that pushes the US Congress to a region that increases the supply of the dollar.
Bitcoin Goes $ 14K
The short-term bearish outlook for the US dollar for bitcoin could mean an expanded bull move towards $ 14,000, close to the highest level in 2019. Scott Melker, a cryptocurrency analyst, noted a similar inverse correlation between Bitcoin and the US dollar index, which would provide an “insane boost” for the cryptocurrency.