- Bitcoin price has moved sideways after jumping during the weekend.
- The VIX index has tumbled to the lowest level since 2020.
- The DXY index has also dropped after the Fed decision.
Bitcoin price moved sideways on Monday as the VIX and the DXY indices retreated sharply. The BTC price was trading at $26,403, which is a few points below the weekend high of $26,768. Still, Bitcoin is about 7% above the lowest during the weekend.
DXY and VIX index plunges
Bitcoin price has staged a strong comeback after plunging to a multi-month low of $24,743 last week. This rebound happened after Blackrock announced that it had filed for the iShares Bitcoin ETF. If the SEC accepts it, it will be the first Bitcoin spot ETF in the United States.
It is unclear whether the SEC will accept the new ETF since it has rejected others by companies like VanEck and ProShares. However, there is a likelihood that the SEC will accept the fund because of the reputation of Blackrock, the biggest asset manager in the world.
Bitcoin has also bounced back as the VIX index has plunged to the lowest level in more than two years. The VIX index has plunged to $14, meaning it has dropped by more than 50% from the highest level this year.
VIX, also known as the volatility index, is a leading gauge that looks at the options volatility of the S&P 500 index. In most periods, risk assets like stocks and cryptocurrencies tend to do well when the CBOE VIX index is falling. The fear and greed index has moved to the extreme greed area.
Meanwhile, the US dollar index, popularly known as DXY, has also dropped to $102.20, which is much lower than the year-to-date high of $115. The dollar slipped after the Federal Reserve decided to leave interest rates unchanged. At the same time, the European Central Bank (ECB) decided to hike interest rates by 0.25%.
Bitcoin price rebound could be a dead cat bounce, which is a pattern where a tumbling asset makes a brief recovery and then resumes dropping.
Bitcoin price prediction
The two-hour chart shows that the BTC price made a strong recovery in the past three days. This recovery happened as investors bought the dip. The coin has now moved slightly below the 50% Fibonacci Retracement level.
Bitcoin has moved above the 25-period and 50-period moving averages while the MACD has formed a bearish divergence pattern. The same is true with the Relative Strength Index (RSI). Therefore, there is a likelihood that the BTC price will retreat in the coming days and retest the support at $25,000. A move above the resistance at 26,706 will signal that there is more upside.
