Bitcoin rises above $51K as the dollar flexes muscles against the euro

Bitcoin
(BTC)
regained
its
bullish
strength
after
reclaiming
$50,000
last
week
and
continued
to
hold
the
psychological
level
as
support
on
Dec.
27.
Meanwhile,
its
rival
for
the
top
safe-haven
spot,
the
U.S.
dollar,
also

bounced
off
a
critical
price
floor
,
hinting
that
it
would
continue
rallying
through
into
2022.

Triangle
breakout

The

U.S.
dollar
index

(DXY),
which
measures
the
greenback’s
strength
against
a
basket
of
top
foreign
currencies,
has
been
trending
towards
the
apex
of
a
“symmetrical
triangle”
pattern
on
its
daily
chart.

In
doing
so,
the
index
has
been
treating
the
structure’s
lower
trendline
as
its
solid
support
level,
thus
hinting
that
its
next
breakout
would
resolve
to
the
upside.


DXY
daily
price
chart
featuring
symmetrical
triangle
setup.
Source:
TradingView

Should
a
symmetrical
triangle
breakout
occur,
the
technical
profit
target
for
bulls
will
be
as
high
as
the
maximum
distance
between
the
structure’s
upper
and
lower
trendlines
when
measured
from
the
breakout
point.
That
puts
the
dollar
en
route
to
roughly
97.80
in
the
coming
session.

Weaker
euro
behind
dollar’s
strength

The
bullish
outlook
for
the
greenback
appears
against
the
prospects
of
the

Federal
Reserve’s
tapering
plans
.
Notably,
the
U.S.
central
bank
signaled
earlier
in
December
its
willingness
to
tighten
its
ongoing
monetary
policy
faster
than
expected,
adding
it
would
follow
up
with
three
rate
hikes
in
2022.

Meanwhile,
the
recent
strength
in
the
dollar
index,
in
part,
came
due
to
an
ongoing
cash
glut
in
the
eurozone.
A
wave
of
stimulus
programs
initiated
by
the
European
Central
Bank
(ECB)
in
the
wake
of
the
COVID-19
pandemic
left
eurozone
banks
with
excessive
cash,
financial
researcher
FactSet

noted
.


EUR/USD
daily
price
chart
featuring
its
downtrend
since
May
2021.
Source:
TradingView

As
a
result,
these
banks
have
been
now
exchanging
their
extra
euros
for
dollars
via
the
Fed’s
reverse
repo
facility,
which
offers
them
0.05%
interest
for
parking
cash,
which
is
better
than
the short-dated
European
government
debt

that
comes
with
negative
yields. 

On
Dec.
20,
nearly
$1.7
trillion
flowed
into
the
Fed’s
repo
facility,
the
highest
one-day
cash
injection
to
date.


Daily
inflows
into
the
Fed’s
reverse
repo
facility
rising
since
May
2021.
Source:
Federal
Reserve
Bank
of
New
York 

Bitcoin’s
summer
fractal
anticipates
bull
run

Bitcoin’s
latest
rise
above
$51,000
comes
as
its
price
tests
a
multi-month
upward
sloping
trendline
as
support,
as
shown
in
the
chart
below.


BTC/USD
daily
price
chart
featuring
ascending
trendline
support.
Source:
TradingView

Nonetheless, BTC
price
now
faces
resistance
in
its
50-day
exponential
moving
average
(50-day
EMA).
The
same
velvet
wave
was
instrumental
in
capping
Bitcoin’s
rebound
attempts
in
November.
So
the
chances
of
bulls
reeling
under
its
pressure
are
high.

But
on
larger
timeframes,
there
appear
possibilities
that
Bitcoin
would
continue
its
bull
run
further
into
2022.
For
instance,
an
independent
market
analyst,
Rekt
Capital,

highlighted

the
cryptocurrency
repeating
a
trend
from
its
May–July
session
that
later
sent
its
prices
to

an
all-time
high
of
$69,000
.

“Bitcoin
continues
to
consolidate
inside
a
range
formed
by
two
Bull
Market
EMAs:
the
green
21-week
EMA
resistance
and
the
blue
50-week
EMA
support,”
the
pseudonymous
analyst
explained,
adding:

“Bitcoin
formed
a
similar
range
inside
these
two
EMAs
earlier
this
year
in
May
(orange
circle).”


BTC/USD
weekly
price
chart
featuring
“bull
market
EMAs”
fractal.
Source:
TradingView

On
the
flip
side,
should
Bitcoin
break
below
its
50-week
EMA,
its
likelihood
of
testing
its
orange
200-week
EMA
will
become
higher
based
on
a
similar
fractal.


BTC/USD
weekly
price
chart
featuring
200-week
EMA
support.
Source:
TradingView

Currently,
the
200-week
EMA
sits
around
$24,250.

The
views
and
opinions
expressed
here
are
solely
those
of
the
author
and
do
not
necessarily
reflect
the
views
of
Cointelegraph.com.
Every
investment
and
trading
move
involves
risk,
you
should
conduct
your
own
research
when
making
a
decision.

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