Bitcoin (BTC) rallied and held onto $20,000 until Oct. 6 as the latest bounce punished short speculators.
Bitcoin retains “important” zone of $19,600
Data from Cointelegraph Markets Pro and TradingView showed that BTC/USD rebounded from local lows of $19,740 on Bitstamp around the Wall Street open on Oct. 5.
The pair then reversed earlier losses, leading short-term early to $20 million in 24-hour liquidations.
At the time of writing, Bitcoin was trading around $20,250, hitting $20,447 on the day.
Michaël van de Poppe, CEO and founder of trading company Eight, had pointed to lows as a suitable entry point.
“There is indeed a correction taking place where $19,800-$19,900 is an area to look long, but also a retest around $19,600 is important for Bitcoin,” wrote at that moment.
Meanwhile, popular trader Il Capo of Crypto reiterated his existing thesis on the short-term outlook for the crypto market. BTC/USD should continue to rise, he argued, before a decisive rejection sends the market below its recent trading range.
“The expectation is an increase of 3-6% in the entire market, on average”, predicted.
“Some shitcoins may be the exception and have higher returns. So I would like to see bearish signals, but yes, that resistance should hold. Then we would see a strong bearish move towards new lows.”
The US Dollar Index (DXY), down from the week’s highs, continued to show comparative weakness, helping to improve sentiment among risk assets.
Analyst sees the S&P 500 losing 500 points
Meanwhile, the cryptocurrency forecast was linked to expectations of a drop in US equities, with which Bitcoin and cryptocurrencies remain highly correlated.
In a twitter thread On Oct. 5, Jurrien Timmer, head of global macro at asset manager Fidelity Investments, said the S&P 500 reading of 3,300 would represent “fair value.”
The Index was up around 2.5% over the week, ending the trading session on October 5 at 3,783.
“There will not be a major buy signal until the Fed changes course or the market does not reach fair value,” Timmer explained.
He added that mass markets were “at the mercy of the Federal Reserve cycle” of interest rate hikes.
According to estimates from CME Group’s FedWatch Tool, the November rally is more likely to match the previous two by 75 basis points.
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