The Bitcoin price remains the all-determining trend setter for the crypto market. After the Bitcoin price fell to as low as $29,173 yesterday, dragging all altcoins down with it, the crypto market is back in the green across the board today.
At press time, the Bitcoin price has once again climbed above the key resistance level of $29,800. This means that BTC has gained 2.7% since yesterday’s low and was trading back above $29,900. Altcoins such as Arbitrum (ARB), Chainlink (LINK) and Avalanche (AVAX) are recording sharp price gains, dwarfing the Bitcoin uptrend.
Here’s Why Bitcoin And Crypto Are Up Today
As NewsBTC reported, yesterday’s correction in the Bitcoin price can be seen as a technical consolidation. In particular, the medium-term macroeconomic outlook continues to argue that both Bitcoin and the entire crypto market will see a continuation of their rally.
An impetus for today’s rally may have been provided by the macro data from China, among other things. As announced in the morning hours today, China’s economy grew by 4.5% in the first quarter of 2023, the fastest pace in a year.
Moreover, the increase was steeper than expected, as the end of “Zero COVID” led to a surge in consumer spending and factory output. All data were positive across the board. Gross Domestic Product (GDP) (YoY) came in at 4.5% in Q1 2023, up from 4.0% estimate.
Retail sales rose to 10.6% in March (YoY), versus 7.4% estimate. The unemployment rate was 5.3% versus 5.5% (estimate).
Overall, strong Macro data from #china 📢
🇨🇳 Industrial Production (YoY) (Mar) came in at 3.9% Vs. 4.0% Est.
🇨🇳 GDP (YoY) (Q1) came in at 4.5% Vs. 4.0% Est.
🇨🇳 Retail Sales (YoY) (Mar) came in at 10.6% Vs. 7.4% Est.
🇨🇳 Unemployment Rate came in at 5.3% Vs. 5.5% Est.#GDP https://t.co/4btei6LudT
— BACH (@MortensenBach) April 18, 2023
The US dollar index (DXY) is also likely to have provided additional impetus. Bitcoin and the DXY are inversely correlated, which means that the cryptocurrency usually rises when the DXY falls.
The DXY has come under heavy pressure in recent weeks, but has experienced a minor relief rally since Friday, pushing the index up from 100,807 to 102,207. Now today, the DXY is showing a renewed weakness, plunging to 101,603.
What’s Next For Bitcoin And The DXY?
With this in mind, Glassnode co-founders Jan Happel and Yann Allemann call Bitcoin’s current move a “shallow correction,” which is the hallmark of a strong bull market rally. The analysts argue that there was a possibility of a potential pullback to $25,000.
However, this has not materialized as Bitcoin has risen to $30k in a matter of days. “This is a very clear signal of the strength of momentum and higher prices are expected,” write Happel and Allemann, who add:
We have pointed out $35k as the next major target – before $47k. This is still the outlook just as we expect much higher prices into late Q2 and Q3. But we still need to ask the question of the possible consequence for bitcoin if/when DXY moves to 105-107.
The two analysts expect the DXY to reach the 91-93 range before the end of the year. However, based on the Elliott wave theory, they do expect a bounce to the upside first:
We expect DXY to reach 105.8 or perhaps 107.2 – before rolling strongly over. A convincing decline below 100 would seriously question this setup.
Featured image from iStock, chart from TradingView.com