The second day of September appears to favor the largest cryptocurrency as Bitcoin surpassed $20,400 alongside the U.S. economic data.
Bitcoin Boosted Amid Declining USD
According to data from the crypto market performance analytic firm, TradingView, the BTC/USD pair is rising. After the opening of the Wall Street trading floor, the price of the pair is moving toward $20,500. This marks a new high for the month after just one day in September.
Moreover, the pair have reacted positively to the United States’ non-farm payroll metrics, which last month performed woefully. However, a further boost came after the G7 unanimously agreed to establish a price cap on Russian crude oil. Similarly, the European Union also proposed to tackle the country’s gas products.
Although the S&P 500 and Nasdaq Composite Indexes gained 1.25% after the first trading hours, the USD plummeted and is expected to go below 109 at the time of publication.
BTC/USD 1-hour chart. Source: TradingView
As a result, Bitcoin moved closer to the $20,700 level, now seen as a launcher for a short squeeze. Meanwhile, liquidating short positions typically results in a quick spot price rise.
However, analysts have projected that the low liquidity might not provide the much-needed resistance.
Multiple Data Indicates “Extreme Collapse”
Analysts discussing the long-term impact of the present event revealed that there is still reason to be bullish. The experts opined that a similar incident has happened previously in the crypto industry and may likely happen again.
In addition, the belief is that if history repeats itself, BTC/USD should be on the verge of a bottom. As a result, the realized liabilities in USD and the market capitalization of Bitcoin will indicate “severe capitulation.”
Meanwhile, only at the bottom of Bitcoin’s 2018 bear market was the collapse worse than it is now. Bitcoin’s price performance has, for most of 2022, been bearish, bar a few bullish trends.
The flagship cryptocurrency’s current price surge indicates what experts forecast for the token. However, the broader crypto market decline is still in force. Still, Bitcoin can force a price shift if traders pull the strings.
Can BTC Investors Expect Bullish Trends?
Data revealed that the total crypto market cap has tanked since August, dropping 6%. While the market is still far from its previous value, it recovered over the past 24 hours.
Meanwhile, industry experts preach caution to excited investors looking to buy the dip. The reason is that there has been a steady decline in transaction activities on the Bitcoin network for some time.
Due to the fall in demand, there is also a drop in the total percentage of fees in the total block rewards of the network. As the fee in the block reward declines, this indicates that the price of Bitcoin is currently oversold.
Moreover, as demands continue to be at their lowest, BTC’s much-anticipated bull cycle is a long way off.
