As investors’ appetite for risk surged on Tuesday, Bitcoin and other cryptocurrencies followed suit and gained in value along with the stock market. Analysts have their eyes on a crucial level for Bitcoin that may spark a huge upward rise if it is broken through.

Bitcoin stock performance

Over the previous day, the price of Bitcoin (Bitcoin stock) increased by 1%, reaching $19,500. Since the beginning of September, the trading price of the most valuable cryptocurrency has been mostly contained inside a band that extends from $19,000 to $20,000. Although Bitcoin’s characteristic volatility has decreased, a correlation to the stock market has remained. This is due to a challenging macro outlook that has hammered risk-sensitive assets, pushing cryptos around in line with the Dow Jones Industrial Average (DJIA) and the S&P 500 (SPX).

According to Craig Erlam, an analyst at broker Oanda, “Bitcoin (Bitcoin stock) has its goal set on $20,000 once more as it continues to rebound back from last week’s slump.” “It continues to show durability around $18,000 to $20,000, where it’s traded for most of a previous couple of months, but that may not be enough if risk appetite deteriorates again,” the author writes.

The Federal Reserve has been under pressure to aggressively tighten financial conditions this year as a result of multi-decade high inflation. This has harmed risk assets and has raised the possibility of a recession, which is even more detrimental to risky bets like Bitcoin.

Like stocks, cryptocurrencies have proven to be sensitive to indicators that reveal continuing inflationary pressures or a resilient economy. This is because an economically robust economy means the Federal Reserve has few incentives to ease off on increasing interest rates. For the same reason, the earnings season for big corporations and the economic outlooks of those corporations are expected to be crucial triggers for cryptocurrency prices in the days ahead.

Even though Bitcoin (Bitcoin stock) has been pretty uninteresting as of late, analysts believe that the currency is getting closer and closer to a critical price level that might drive growth. Specifically, Bitcoin (Bitcoin stock) is challenging its 50-day moving average close to $19,700 again.

According to Katie Stockton, managing partner of the technical research firm Fairlead Strategies, “Bitcoin is tightly wound up after holding up above its long-term support zone of $18,300 to $19,500 last week.” This statement was made. Suppose the 50-day moving average is broken through. In that case, we will switch to a bullish bias for the short term, keeping in mind that our short-term indicators are pointing higher. A retest of the daily cloud at $21,700 would be supported if there was a breakthrough.

The technical picture is looking rather positive, and if it holds, Bitcoin  (Bitcoin stock) might rebound to levels not seen since the beginning of summer. However, discussions of a price rise to $1,000 or $2,000 highlight just how far Bitcoin has gone. As of Tuesday, Bitcoin (Bitcoin stock) was trading at less than one-third of its all-time high, which occurred in November of 2021. And Stockton does not see many grounds to assume that the bottom of the bear market for Bitcoin has been reached, which is something that cryptocurrency speculators have been counting on progressively.

“We continue to have a pessimistic outlook for the intermediate term,” stated Stockton. Bitcoin (Bitcoin stock) is trading below its 50-day moving average, which puts it more dangerously below its secondary support at $13,900. Despite this, the risk of a breakdown remains considerable. Despite being oversold, the long-term trend is still extremely bearish. There is no indication that we have reached a long-term low yet.”

Ether, the second most valuable cryptocurrency, increased by 1%, bringing its price to $1,325. The performance of lesser-known cryptocurrencies or alternative coins was more varied, with Solana increasing by 1% while Cardano decreased by 1%. Memecoins demonstrated a significant amount of the same behavior, with Dogecoin increasing by less than one percent and Shiba Inu decreasing by less than one percent.

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