Bitcoin Regains $30K. Early Signs of Recovery or Range-Bound Trading?
Major coins such as Bitcoin and Ethereum started a fresh rally Thursday, on the back of a weaker US Dollar and a renewed interest in the crypto market.
Thursday’s push broke through the key psychological level at $30,000 and took Bitcoin above the 50-period Moving Average on an hourly chart.
BTC/USD reached as high as $30,725 but at the time of writing, it is not clear if we are dealing with the start of a stronger rally or just a “knee-jerk” move of the market.
Just recently, TerraUSD (UST) unpegged from the US Dollar, which triggered a panic wave across the entire crypto market, affecting stablecoins in special. Arguably the most popular stablecoin, USD Tether, dropped to $0.94 on some exchanges, before returning to its normal level.
The drop fuelled more speculation about Tether’s US Dollar reserves but on May 19, the Tether Group published a report conducted by independent accountants MHA Cayman. The said report revealed that the Group’s assets are worth at least $82 billion, exceeding its consolidated liabilities.
According to the same report, “the Group’s consolidated reserves held for its digital assets issued exceeds the amount required to redeem the digital asset tokens issued.” This basically means that even if all USDT holders would withdraw their entire amounts at once, Tether Group would be able to satisfy their needs. This puts an end to the speculation that plagued USD Tether for a long while and hopefully restores trust in the blockchain’s most popular stablecoin.
Chart Analysis – BTC/USD
Since breaching the support level at $30,000, Bitcoin has been trading above and below it, without a clear bias. Yesterday, the flagship cryptocurrency climbed again above the mentioned level and is currently trading at $30,165 but the battle for $30K is still not concluded.
The MACD lines are moving closer together and a bullish cross is imminent but unless we see an increase in momentum, the break of $30K is not confirmed. The Relative Strength Index entered oversold territory on May 9, which sets the stage for a stronger move up. However, this oversold condition alone doesn’t guarantee a bullish move.
For a stronger rally to take shape, we would need to see increased momentum, as well as a full daily candle close above $30K. The levels to watch are $33,000 as resistance and $28,600 (Thursday’s low) as support; of course, the current level ($30,000) and the way the price behaves around it will be crucial for further developments.