Signal price

Bitcoin price rallies to $21,000 as whales move and dollar slides

Source: Adobe Stock

Bitcoin price is soaring today, up almost 8.6% to $20,963 and it is pulling the rest of the crypto complex.

Data site CoinGecko shows that the prices of the top 20 coins are trading strongly in the positive, posting gains of between 5% and 9%, as does the price tracker on various exchanges.

Ethereum price, which has been under bid lately due to the Ethereum Merge upgrade, is flashing green for the week, up 6.6%. Today, ETH has already traded as high as $1,714 and is at the time of writing priced at 1,699, up 4.8% in the last 24 hours.

Among other top alts, Shiba Inu breakout meme coin is up 9% to $0.00001324 while Layer 1 token Polkadot finds favor priced at $7.77, 9% for best.

Other gainers include exchange OKX coin OKB, up 19% at $16.49, PoW coin Ravencoin likely to benefit from the merger, is 21% higher at $0.044 and the digital asset NFT ecsystem ApeCoin is trading 17% higher today at $5.25.

Total market capitalization is back above $1 trillion at $1.026 billion as traders ignore the bearish sentiment that has been building up throughout this week.

BTCUSD 1-day chart, Coinbase September 9, 2022. Source: TradingView

Did Queen Elizabeth’s Death Trigger Bitcoin Price Rise or Dollar Fall?

While the superstitious might link the rebound to the death of Britain’s Sovereign Queen Elizabeth II, the truth is probably more mundane as bitcoin was already touching oversold territory, as seen in the chart above on the RSI gauge. .

Nevertheless, an oversold signal can lead unsuspecting traders into a value trap – simply put, a price can be low for a very good reason. But as we explain below, it could be different.

To know if we are seeing a dead cat bounce from something more promising from a bullish perspective, as always lately, we must first refer to other asset classes, namely the stocks, bonds and currencies.

Risk on Crypto and Stocks Trade More in Tandem

Crypto’s gradual positive correlation with tech stocks in particular, but the stock market more broadly, is still highly visible.

So when looking for drivers of interest in buying crypto today, look no further than the rally in stocks.

From a global perspective, if the green wave in the Asian trading session holds at the US open and close later today, it will be the first positive week for global stock prices on the last four.

Today’s economic indicators suggest that demand in China is not as weak as feared and that stimulus measures could further improve the outlook.

Yet it is inflation and the reaction of the US Federal Reserve and other central banks that focus the attention of market participants.

The European Central Bank (ECB) raised interest rates by 0.75% after raising rates for the first time in 11 years in July.

The ECB is making a belated effort to control soaring inflation. But on a more positive note for equity markets, petrol prices eased on hopes that the EU will present measures today that could bring energy prices under control and thus weaken inflation.

Dollar and Bonds Fall – Gold and Crypto Rise

Elsewhere on the macro front, the dollar is down 1%. US bond yields sold off as yields rose, a sign of a tentative return to some risk sentiment.

Bonds are often bought as insurance in bear markets, although inflation eats away at the value of their yield – bond yields move inversely to bond prices.

Additionally, oil and gold are both rising, with subsequent developments suggesting that investors are still looking for a safe haven, even as they tentatively buy stocks and cryptos.

Although there are well-founded fears that the bitcoin market could revisit the lows of around $17,000 seen in June this year, and could easily dip below $15,000 and even $10,000 , it is likely that both of these events are bottoming out, which the current low rally can be seen as a major confirmation of.

Is it time for DCA in the crypto markets?

In other words, accumulating bitcoin and other cryptos with an average dollar cost strategy at and around current levels will likely pay off on a mid-term review 12 months from now.

The encouraging scenario for the bulls is that declines from here, towards $17,000 for example, could continue to attract buyers, as we are currently seeing.

Even though there has been a lot of coverage of the crypto winter, there has not been as much of a recovery outlook that has always followed in the past.

Institutions Brace for Bitcoin and Crypto Price Rise

With this in mind, market participants should keep in mind that there is a good reason institutions move through space.

The latest in this regard is fund manager Franklin Templeton, but this follows today’s news that Singapore’s Whompoa Group is also opening up to crypto, as is DBS, which announced more earlier this week that I was providing its top 300,000 customers with access to digital assets. .

Watch the dollar like a hawk for crypto signals

To distill the analysis above, the most notable data point is in the US Dollar where we see dollar weakness correlated to the strength of the bitcoin crypto, as this Bloomberg chart clearly shows:

Additionally, as we reported earlier in the week, open interest in crypto futures is on the rise, especially for Ethereum, which saw volumes overtake bitcoin for the first time.

But it is in the BTC perp futures market that we see determined bullish action today, which Kaiko analyst Riyad Carey drew attention to:

We should add to this the fact that 1,000 bitcoin whales have been distributed to exchanges since Luna’s collapse and how that lines up with local highs, as you can see in the chart below from Glassnode.

Source: Glassnode

This presents strong evidence of an argument for the average dollar cost in the market, despite bitcoin’s crash of late.

Granted, from here volatility will continue, and perhaps increase, but we could see the first whispers of a bottom being put in the crypto market.