Bitcoin has benefited from the return of risk-on appetite, with a spike above $23,000, and the significant break to the upside has some analysts calling the bottom.
Market leader Bitcoin (BTC) surged to trade above $23,000 for the first time since June 13 in an unexpected turn of events. Bitcoin has increased by 9% in the last 24 hours to $23,400 at the time of writing.
This results in BTC moving above the 50-day simple moving average for the first time since April 10. A daily close above this line would indicate the beginning of a trend reversal.
The move reflected a widespread risk-on sentiment in global markets, as evidenced by significant gains in major European and US indices.
However, a depleted dollar index (DXY) coincided with the renewed bullish sentiment. On July 14, the DXY reached a high of 109.0608. Since then, the asset has struggled to re-establish itself against Monday's low of 106.6199, with three consecutive red daily closes.
Is Bitcoin nearing its bottom?
Bitcoin's decline since May has reverberated throughout the cryptocurrency industry. BTC appeared to have bottomed out since June 14, reverting to a relatively sideways price pattern.
Today's significant break to the upside has some analysts predicting the bottom. Further elaborating, Edward Moya, an analyst at Oanda, stated that continued signs of stable price behavior through the end of the month could indicate the end of the bear market.
“If Bitcoin continues to stabilize here over the next two weeks, the crypto winter could be over. Market positioning became extreme and that could allow for the bottom to have been made if the institutional money buys in.”
However, a stumbling block is the upcoming Federal Reserve monetary policy meeting on July 27. Traders predict that the Fed will raise interest rates by 100 basis points in an attempt to cool runaway inflation.
The previous 75 basis point increase on June 15 resulted in a 12% swing in the price of Bitcoin, which closed the day marginally higher than the previous at $22,647.
