The perfect inverse correlation between bitcoin and the US dollar is nowhere to be seen as all-time highs come nearer and nearer. Bitcoin crept to levels within 10% of all-time highs on March 10 as the strength in the USD failed to dent the bullish trend.
Now, $56,000 is the resistance that bitcoin must crack next. Data acquired from Trading View tracked a comeback from the overnight correction with the BTC/USD pair targeting $55,000.
After reaching two-week highs of $54,500 the previous day, bitcoin improved on its performance to reach $55,700 before it encountered a strong band of resistance and headed lower. at the time of writing, bitcoin is heading higher again hovering around $56,350.
The latest price action underscores the new-found strength in the biggest crypto in March, something that continues to push it to within striking distance of all-time highs around $58,300. One analyst commented about the last 24 hours’ action on Twitter:
“Beautiful rejection on the $56,000 area for #Bitcoin here. So far, everything fine. If the $52,000 area holds, we can see further sideways action and renewed tests of $56,000. However, once again, $52,000 is critical to hold to avoid further downwards moves.”
At the time of publishing, there was little indication that a drop of $52,000 was imminent, as the holders celebrated yet more institutions joining the bitcoin adoption race. This time around, it was the American Residential Warranty that teamed with Gemini crypto exchange to invest.
Gemini co-founder Tyler Winklevoss responded:
“And another company has decided to put bitcoin on its balance sheet.”
Interestingly, orderbook data from the biggest exchange by volume, Binance, showed that sellers lined up $56,000 and upwards, with a lot of support forming below $49,000.
DXY Growth Fails To Push Bitcoin Down
Elsewhere, this month continues to produce interesting counter-trends for the bitcoin traders, with the dollar flipping to a correlated asset from an inversely correlated one. Based on previous reports, the US dollar currency index (DXY) seems to spark some downside pressure on bitcoin whenever it manages to strengthen speedily, with the reverse also proven to be true.
While that was a critical feature of the market landscape in the whole of 2021, this year has so far seen the phenomenon’s strength start to erode. In the last two weeks, both BTC/USD and DXY have gained concurrently.