Bitcoin has fallen steeply since setting a high around $58,000 per <span class="wpg-tooltip-term-title">Coin</span></h3><div class="wpg-tooltip-content">A coin is a unit of digital value. When describing cryptocurrencies, they are built using the bitcoin technology and have no other value unlike tokens which have the potential of software being built with them.<p class="wpg-read-more"><a href="https://www.newsbtc.com/dictionary/coin/">» Read more</a><p></div>”>coin earlier this month. After now days in a row of downside, and a sweep of lows, there’s a bullish divergence brewing that could take the leading cryptocurrency by market cap soaring back higher.
At the same time, the dollar is once again weakening after a short-term bounce, and could help fuel the momentum to send Bitcoin to new records. Here’s a detailed look at why BTC could soon see a strong bounce.
Bitcoin Readies Rebound As Dollar Hits Resistance
Bitcoin has had an epic start to 2021 and a strong continuation of the bull trend that blossomed back in 2020 following Black Thursday. The direction has been only up since, with only a few bouts of corrections along the way.
Related Reading | Coinbase Bitcoin Outflows Are The Strongest Bullish Signal “Ever”
The most recent drop cut more than 20% off the price per <span class="wpg-tooltip-term-title">Coin</span></h3><div class="wpg-tooltip-content">A coin is a unit of digital value. When describing cryptocurrencies, they are built using the bitcoin technology and have no other value unlike tokens which have the potential of software being built with them.<p class="wpg-read-more"><a href="https://www.newsbtc.com/dictionary/coin/">» Read more</a><p></div>”>coin, coinciding with a strong bounce in the dollar as market participants begin to reduce leverage and associated risk. However, the dollar is already back to weakness, according to one crypto analyst.
The dollar has been rejected at low timeframe resistance and BTC could respond | Source: DXY on TradingView.com
The dollar trades inversely correlated to the leading cryptocurrency by market cap, and represents one half of the asset’s base trading pair (BTCUSD).
The dollar is the global reserve currency and has been particularly strained throughout the pandemic. Inflation related to growing money supply has weakened the dollar, but benefitted Bitcoin.
How The Top Cryptocurrency Could Be Staging A Turnaround
The dollar bounce appears to have been short-term profit-taking, or a reduction in risk, and is ready