Market Analysis

This is the last major hurdle before Bitcoin price can target $20,000

Bitcoin (BTC) price has been showing impressive strength in the previous weeks and today the price made a new 2020 high at $13,666.

This momentum was made alongside weakness in the U.S. dollar and many analysts believe that as long as the dollar remains weak, Bitcoin and other safe-haven assets will do well.

However, as Bitcoin shows strength, altcoins are failing to follow suit and most altcoins are selling off against BTC. Bitcoin’s dominance rate has been rising in the previous weeks and this shows that the market’s momentum is based around Bitcoin.

Traders expect resistance between $13,500-$14,000

BTC/USD 1-week chart. Source: TradingView

The weekly chart shows a clear resistance zone between $13,500-$14,250 as the next big hurdle for the markets.

The price of Bitcoin broke through the $11,600-$12,000 barrier as the crucial barrier for further upward movement. This breakthrough caused the price to continue rallying toward the next hurdle, which is between $13,500-$14,250.

It’s not likely to anticipate an apparent breakthrough in one-go as it’s the first test of this resistance zone, but the overall weakness of the dollar is signaling that the price of Bitcoin could only run higher.

U.S. dollar weakness is propelling the Bitcoin rally

U.S. Dollar Currency Index 1-day chart. Source: TradingView

The U.S. Dollar Currency Index (DXY) is currenlty showing significant weakness after the last test of the 94.6 points level was instantly rejected.

This rejection caused DXY to drop down further. More importantly, since the rejection occurred on Sept. 24, Bitcoin’s price started to rally.

This rally increased the price of Bitcoin by $3,000 as it rallied from $10,500 to $13,500. The correlation between DXY and Bitcoin has increased since the March crash and this is an inverse correlation.

If the dollar holds the 92.50 area for support, there’s a potential likelihood of a reversal on the price of Bitcoin as well. This would mean a correction in the crypto markets, which isn’t bearish at all.