Bitcoin edged higher on Wednesday, with price tallying briefly above $11,500, a key technical resistance, on a weaker US dollar demand.
The benchmark cryptocurrency hit circa $11,540 during the early New York trading session before paring part of its intraday gains. Its minor downside still maintained a positive intraday outlook, with the price even above 1.29 percent.
The bounce-back occurred a day after BTC/USD fell to $11,769, its lowest level in more than two weeks. Traders used the newfound support to fill their Bitcoin bags, suggesting that there was adequate buying pressure near the levels before price slips any further below.
Some analysts were fearful of the cryptocurrency falling towards $10,500 as it repeatedly failed to hold its rallies above $12,000 all across August. Nevertheless, fears of an extended period of inflation kept others stick to the cryptocurrency’s long-term bullish outlook.
The same macro fundamentals played a key forced behind Bitcoin’s choppy price action this week. Investors grappled with the idea of whether or not the Federal Reserve would unveil its forward guidance on inflation rates as global policymakers sit together for the first virtual Jackson Hole Symposium.
The US central bank’s chairman, Jerome Powell, will deliver a keynote speech on Thursday. Economists expect him to speak about whether the Fed would let the inflation rise above its benchmark annual target of two percent.
If Powell does, then traders might see it as a signal of a more bullish Bitcoin.
“The Fed meeting will decide our children’s financial future,” SAID Alex Mashinsky, the founder of Celsius Network. “We have to understand that the FED is no longer fighting inflation and unemployment. It will do “whatever it takes” to fight out of control debt bubble by printing more new debt than in the past 100 years.”
That partly explains a weaker US dollar Index (DXY) on Wednesday. The index, which pits the greenback against a basket of foreign currencies, fell 0.15 percent. It allowed high-yielding assets, including Bitcoin and gold, to grow higher.
The dollar also declined on growing bids for safety assets against the rising US-China geopolitical tensions.
Bitcoin Technical Outlook
Crypto trader Nico worried about Bitcoin’s potential to fall towards $10,500 despite its latest upside correction. He pointed to a new CME gap that appeared on Bitcoin Futures’ current 4H chart near $11,330-11,395.
The spot bitcoin fill these missing candles nine out of ten times, according to historical data.
Market analyst Teddy Cleps, meanwhile, expected the price to grow higher as its MACD hinted at the formation of a bull cross. That typically is a bullish sign.
“After bouncing from the 200ema bitcoin is testing a 4h MACD bull cross and the resistance of cloud pump it for financial freedom,” he said.