Technical analysts highlight key levels for Bitcoin as macro factors driving the markets

Bitcoin prices have encountered some turbulence recently, falling below $19,000 earlier this week, only to bounce back.

Today, the cryptocurrency has been relatively stable, trading between $19,000 and $19,500 on TradingView.

After these recent price movements, where is the digital currency headed next?

Delving into this matter, analysts emphasized the crucial role of macroeconomic developments such as inflation, central bank policy and the recent strengthening of the US dollar.

In addition, they identified key levels of support and resistance that technical traders can watch going forward.

[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]

Central bank policy

The European Central Bank chose to increase its three key interest rates, one that governs deposits and the other two that involve short-term lending, by 75 basis points today.

The financial institution’s Governing Council, which is responsible for making monetary policy for the eurozone, further indicated that it expects to push those rates higher “over the next few meetings.”

The Federal Reserve has raised its benchmark interest rate significantly in recent months, and market participants are more than 80% confident that the financial institution will announce another rate hike of 75 basis points at its next policy meeting, according to survey data provided by the U.S. central bank. CME FedWatch Tool.

Dollar index

Another significant macroeconomic development is the recent strength in the US Dollar Index (DXY), which measures the purchasing power of the dollar relative to other fiat currencies.

Over the past week, this index reached a reading of 110.68, the highest in more than 20 years. Since then, the measure has retained much of its strength, trading north of 109.00.

“Bitcoin is being hurt by the rising dollar index (DXY),” stressed William Noble, chief technical analyst for research platform Token Metrics.

“I would imagine if DXY consolidates, BTC could move higher,” he added.

Important technical levels

After highlighting these crucial macroeconomic developments, market observers pointed to key areas of support and resistance that traders should monitor.

“The next lower resistance level is the high $18k, and if broken, the mid-$18k could accelerate the selling pressure for BTC, since the mid-$18k was the last price drop before BTC recovered above $20k,” said Armando Aguilar, an independent cryptocurrency analyst.

“The upper resistance level is seen in the mid-$20k, where BTC stood at the beginning of September,” he added.

Noble also weighed in on the matter.

“I don’t see bitcoin going lower than 18k, unless there is a crypto ‘black swan’ and everyone is dumping bitcoin to buy Ethereum after the merger,” he said.

Brett Sifling, an investment advisor for Gerber Kawasaki Wealth & Investment Management, shed further light on the situation.

“The June low around $17,500 is certainly a support level to see as we creep closer to that,” he said.

“If we hold the June lows, there is resistance at the $25,000 level,” Sifling said.

Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, EOS and sol.