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The price of bitcoin has risen by 2% in the last 24 hours. After nine consecutive red daily candles, the price of BTC finally showed a green daily candle yesterday (Sunday). However, analysts are divided on whether Bitcoin will rise back to $30,000 or fall again.
Why is bitcoin and cryptocurrency on the rise today
Today’s rise in Bitcoin, as always, can be explained by several reasons, and they are all interconnected. However, the US dollar index (DXY) is currently in the spotlight of the Bitcoin and crypto markets due to its inverse correlation. Right now, DXY is (also) facing a major turning point.
As technical analyst Geert van Lagen explains, DXY could experience a head and shoulders (H&S) reversal similar to what happened in 2020/2021. However, this time it signals a downtrend, not an uptrend.
More than two years ago, DXY bottomed the H&S in a red downtrend, the right shoulder was above the SMA 200, and the latest pullback marked the beginning of the rally. The DXY is currently colliding with the top of the H&S above the green uptrend. The right shoulder is below the SMA 200, and the current uptrend could be the last bounce before the bearish phase.
DXY head and shoulder reversal | Source: Twitter @GertvanLagen
So why is Bitcoin and crypto on the rise today? DXY was rejected at the 102.8 resistance level after rising over the past five days. DXY fell back a bit (for now) to 102.5 at press time. The move could give crypto traders hope that the head and shoulders (H&S) reversal is being confirmed.
On the other hand, Bitcoin itself is currently facing a hotly debated head and shoulders pattern on the 1-day chart. While some analysts are calling for another Bitcoin crash to $25,200 or even lower, other analysts see that BTC is on a very good track to reverse the chart pattern.
Like March 10, the long wick candle on May 12 (last Friday) may have marked a local bottom for Bitcoin. However, to confirm this, BTC should rise above the trend line (black) at $27,500 in the near future.
#Bitcoin needs to confirm invalidation of the head & shoulders pattern (1D chart). Then, local bottom is probably in.
🎯A breakout above $27,500 is the target. pic.twitter.com/vjqAAcScH3
— Jake Simmons (@realJakeSimmons) May 15, 2023
On the other hand, today’s price movement can again be attributed to the futures market. According to analyst @52Skew, short positions in Bitcoin on Binance decreased at the beginning of the Asian trading session by a total of -2.2k BTC. Despite this, the funding rate remained in negative territory.
This is an indicator that the futures market remains bearish. Most short traders pay a funding fee to long traders. Notably, the spot market is still showing a relatively high premium. (Short squeeze stuff?)
#Bitcoin With a relatively high spot premium causing some negative funding rates across the board.
Spot premium = Difference between spot market prices and perpetual/futures market prices. pic.twitter.com/cJWl31RN7X
— Daan Cryptocurrency Trades (@DaanCrypto) May 15, 2023
The third reason may be the growing renewed interest in bitcoin from large investors. As analyst Ali Martinez found, the number of addresses with a balance of 100 BTC or more has increased by 200 in the last four days.
#Bitcoin | The number of addresses with a balance of 100 $BTC or more have increased by 200 addresses in the past four days. pic.twitter.com/qmsLPoSXEr
— Ali (@ali_charts) May 15, 2023
At press time, the price of Bitcoin was hovering below the trend line, trading at $27,411.
Bitcoin price, 1-day chart | Source: BTCUSD on TradingView.com.
