- Bitcoin broke above key resistance following fake BlackRock ETF approval news
- But despite the fake news, the crypto managed to stay above $28,000
- Can the positive momentum last and take Bitcoin above the next resistance at $30,000?
Bitcoin, which had been experiencing a gradual recovery for over a month, has managed to pull off a significant breakthrough, overcoming the crucial $28,000 resistance level
This surge in Bitcoin's performance was driven by heightened volatility earlier in the week, sparked by the hotly-anticipated Bitcoin ETF approval news, which turned out to be fake eventually.
The market's rapid reaction to this news, originating from a highly respected crypto media source, resulted in a swift ascent of Bitcoin's value from $27,000 to $30,000, representing a remarkable 10% increase.
It is worth noting that this occurrence highlights the market's heightened sensitivity to Bitcoin ETF developments, while also emphasizing the importance of the cryptocurrency finding support in the $28,000 range, even after the initial surge was partially curbed by BlackRock (NYSE:BLK)'s disavowal of the news.
Although this news turned out to be fake, it managed to keep Bitcoin above $28,000, which corresponds to its 200-day moving average. The limited retracement can be attributed to investors who were quick to react to the news and were convinced that Bitcoin would quickly turn upwards if the ETF approval materialized.
Currently, Bitcoin further increased its upward momentum on the last trading day of the week after recovering close to 1.5% in yesterday's trading. Bitcoin, which started to see support at the $28,000 limit for the rest of the week, closed above the resistance formed at $28,600 on average in the short-term outlook with yesterday's positive close.
Can the Positive Momentum Last for Bitcoin?
As the positive trend accelerated today, Fib 0.618 resistance, which corresponds to $29,000 according to the July-September correction starting at $31,000, was quickly passed. As a result, Bitcoin broke the resistance line in the range of $28,600 - $29,000 before the weekend with volume transactions.
Today, it is seen that the gap formed in the retracement at the beginning of the week has started to close, while the Fib 0.786 level at $ 30,000 is on the radar according to the short-term Fibonacci retracement levels. If the day's close is realized above this value, it may strengthen the upward momentum, and the $31,000 band, the July peak zone, may be retested. If it is exceeded, we can see that short-term momentum can continue up to the $33,000 - $35,000 range.
Conclusion
If Bitcoin encounters resistance around $30,000 and profit sales accelerate in this region, a horizontal outlook is likely to occur for a while in the range of $29,000 - $30,000, as recorded in July. A bounce from this region would be possible with news that could positively affect the markets.
Among these positive news, apart from the much-awaited Bitcoin ETF approval, a positive development that may come out of the SEC - XRP case may be a positive internal dynamic. Apart from this, as an external factor, the fact that the DXY remained flat this week is an important factor in breathing in risky assets such as Bitcoin.
The decline in demand for the dollar in the coming days may support Bitcoin's rise. In some periods, Bitcoin can be seen as a safe-haven asset like gold, which has risen rapidly with the increase in geopolitical risks.
Conversely, the growing anticipation of the Federal Reserve pivoting its interest rate policy might play a pivotal role in the return to a more normalized high-interest rate environment, which has been undervalued for an extended period. Federal Reserve Chairman Jerome Powell, in a recent address, issued a clear statement indicating that the rate hike could be deferred if inflation remains stable.
Powell reemphasized the Fed's 2% inflation target and suggested that they would adopt a balanced approach in addressing inflation, taking into account the risk of a potential recession. This speech reiterated the Federal Reserve's shift from a hawkish to a dovish stance, aligning with the statements of other Federal Reserve officials this month. A clearer picture of this shift will emerge following the interest rate decision set to be announced on November 1, as well as the subsequent market commentary.
To sum up, from a technical standpoint, the approach taken by both buyers and sellers as they approach the $30,000 threshold appears to be a key determinant of the overall market trend.
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Disclaimer: The author does not own any of these shares. This content, which is prepared for purely educational purposes, cannot be considered investment advice.