Bitcoin defied expectations by rising 2% to $26,750 despite the U.S. dollar index reaching a 10-month high. Typically, a stronger dollar leads to a bearish impact on risk assets, including cryptocurrencies. However, spot market buyers initiated a move higher for Bitcoin, which then triggered market buying and a short squeeze. This caused prices to rise further as bears covered their bearish futures bets.
Notably, data from Coinalyze revealed that the early Bitcoin rise was accompanied by an increase in net capital inflows or net buying in the spot market. Later, the stablecoin-margined and coin-margined futures contracts also contributed to the market’s upward movement. In addition, other major cryptocurrencies such as ETH and XRP followed Bitcoin’s lead.
Despite XRP potentially facing a death cross, where the 50-day simple moving average of prices falls below the 200-day SMA, indicating a long-term bearish shift, the cryptocurrency still gained 1%. It is worth noting that similar lagging indicator patterns have appeared in Bitcoin and Ether in recent weeks, often leading sellers to be caught on the wrong side of the market. Therefore, Bitcoin’s downward momentum may have been halted below $25,000 after experiencing a death cross on September 11.
