Bitcoin logged modest upside gains during the Monday trading session as traders assessed the possibility of a weaker US dollar.
The analogy followed commitments from the US Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi to revive the long-pending coronavirus stimulus package. As they vowed to come up with a bill by October 2, investors reduced their exposure in the dollar market. The sentiment helped to lift riskier assets, including Bitcoin.
As of 0000 UTC Monday, BTC/USD was trading near $10,956 on US-based crypto exchange Coinbase. The pair shed a portion of its intraday gains later but maintained an overall upside bias both technically and fundamentally.
The gains followed a considerable sell-off in the first half of the last week. Traders were waiting for Mr. Mnuchin and Federal Reserve Chairman Jerome Powell‘s statements on the second coronavirus aid bill. Up until September 24, both the US officials maintained their stance that the US economy won’t be able to recover without a monetary aid from the government.
The stimulus deal entered a long deadlock in July after the Democrats and the Republicans failed to reach a conclusion over its size. In early September, the Republicans introduced a $500 billion package, which Democrats rejected against their $2 trillion-plus demand.
Economists and analysts anticipated that there won’t be an aid until the US presidential election on November 3. The prospects of lesser dollar liquidity, coupled with the uncertainty surrounding the outcome of the presidential election, sent investors looking for safety in the US dollar.
As a result, other markets fell, including Bitcoin.
What’s Ahead for Bitcoin
Bitcoin expects to grow further into this week on the stimulus package talks. Technically, the cryptocurrency is holding support above $10,500 while its 50-day moving average is behaving as resistance.
CEX.IO’s Executive Director Konstantin Anissimov reiterated the same in a note sent to BlocDesk Monday morning. The analyst expected the 50-DMA to hold Bitcoin from falling downwards. At the same time, he added that its 100-DMA would keep it from establishing a full-fledged bullish breakout. Excerpts:
“THE 50-DAY SIMPLE MOVING AVERAGE APPEARS TO BE ACTING AS RESISTANCE WHILE THE 100-DAY SIMPLE MOVING AVERAGE SERVES AS SUPPORT THE INABILITY TO DETERMINE IN WHICH DIRECTION THE TREND WILL RESULT MAKES THE TRADING RANGE BETWEEN THESE SUPPORT AND RESISTANCE LEVELS A REASONABLE NO-TRADE ZONE.
“Bitcoin would have to close above $11,150 or below $10,475 to provide a clear path for where it is headed next,” he added.