Bitcoin Could See More Gains In The Near Term

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After a record nine-week decline, the bitcoin price surged along with other cryptocurrencies on Monday. The BTCUSD pair climbed back above the $30,000 figure to notch two-week highs around $30,800 as buyers have finally reemerged at the start of the week. In the process, the coin exceeded the 20-DMA while the daily RSI turned sharply higher in neutral territory, suggesting the most popular cryptocurrency is back-driven by the bullish momentum at this stage. 

Once again, digital currencies take clues from the traditional financial markets where the upside impetus prevails after the weekend. Investors cheered the news from China where authorities in Shanghai and Beijing eased COVID restrictions as the outbreak faded further. Also, riskier assets are now supported by rising expectations for a more measured approach by the Federal Reserve amid the emerging signs of peaking inflation.

Against this backdrop, the safe-haven dollar stays on the defensive on Monday, struggling to attract demand around one-month lows. As US stock markets will be closed today in observance of Memorial Day, USD pairs could continue to trade within tight ranges in the near term, with traders’ focus gradually shifting towards Friday’s US NFP employment report that will set the tone for the greenback and for financial markets in general.

Should the risk-on tone persist and the dollar stays under pressure in the coming days, the crypto space may see more gains following more than two months of losses. BTCUSD could challenge the $31,400 zone, while the key target arrives at $40,000 where May’s highs lie. However, the way north is unlikely to be straightforward, with bearish risks persisting anyway.