Bitcoin (BTC) trades at $26,267 with a bearish bias on the four-hour timeframe. The technical formation points to 5% more losses as major SMAs pose stiff resistance on the upside. Concerns over the U.S. dollar's impact on the big crypto may be overstated by investors, particularly in the longer term.
The US Dollar Index (DXY) hit its highest level in nearly 10 months on Friday last week, indicating increasing confidence in the U.S. dollar compared to other fiat currencies like the British pound (GBP), Euro (EUR), and Japanese yen (JPY).
The US dollar grew even more bullish after a golden cross appeared on the daily chart (see below). This is a bullish signal that appears when the 50-day moving average crosses above the 200-day MA. In technical analysis, this is usually taken as a precursor to a sustained rally. As
As a result, investors are concerned about how a strong dollar could affect Bitcoin and the entire crypto market. At the moment, the BTC price looks weak as it moves below all key levels with the support a t $26,000 under risk of breaking.
BTC price action had led to the formation of an inverted V-shaped pattern on the four-hour chart. The pioneer cryptocurrency was sitting on immediate support from the $26,000 psychological level. A four-hour candlestick close below this level would see price drop to complete the V-shaped pattern at $15,600.
Breaching this level would see sellers pull BTC lower, collecting the demand side liquidity below that toward the $25,000 psychological level. Such a moev would represent a 4.66% decline from the current price.
This grim outlook was supported by the downward facing Relative Strength Index (RSI). The price strength at 39 suggested that the bears were in full control of BTC.
The flagship crypto was also facing stiff resistance in its recovery path. If the Bitcoin price was to turn up from the current level, it will meet the first roadblock around the $26,450, embraced by both the 100 SMA and the 20 SMA.
Note that these two MAs had just sent a call to sell Bitcoin when the 20 SMA crossed below the 100 SMA. This reinforced the negative narrative for BTC.
Additional barriers lie at $26,725, where the 50 SMA lies, and the $27,000 psychological level. Rising higher would bring the $27,500 swing high into the picture.
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