Bitcoin Defies Dollar Rally as Spot Buyers Drive the Market Higher
Bitcoin, the leading cryptocurrency, experienced a 2% rise to reach $26,750 during the early U.S. trading hours, in contrast to the continued rally of the U.S. dollar index. Despite the dollar index reaching a fresh 10-month high of 106.48, Bitcoin remained unfazed by its usual bearish impact on risk assets, including cryptocurrencies.
According to pseudonymous crypto trader and analyst Skew (@52kskew on X), the upward movement of Bitcoin was initiated by spot market buyers. This subsequently triggered market buying and a short squeeze, forcing bears to cover their bearish futures bets and driving prices even higher.
Coinalyze’s data suggests that the rise in Bitcoin from $26,000 was accompanied by an increase in the spot market’s cumulative volume delta (CVD), indicating net capital inflows or net buying in the spot market. The CVD in stablecoin-margined and coin-margined futures contracts also contributed to the market’s upward trend.
Not only did Bitcoin experience gains, but other major cryptocurrencies such as ETH and XRP also followed suit. XRP managed to gain 1% despite the looming occurrence of a death cross—a technical analysis pattern where the 50-day simple moving average of prices falls below the 200-day SMA, signaling a long-term bearish shift in momentum.
XRP’s impending death cross aligns with similar patterns witnessed in recent weeks in Bitcoin and ether. These SMA-based patterns are lagging indicators and often trap sellers on the wrong side of the market. Bitcoin’s downward momentum, for example, lost steam below $25,000 after encountering a death cross on September 11.
The market’s response to the dollar index’s surge and the resilience of Bitcoin indicate the continuous faith and interest in cryptocurrencies, even in the face of traditional market trends. As individuals and institutions increasingly recognize the potential of digital currencies, their acceptance and adoption will likely continue to grow.
