Bitcoin Shines as a Safe Haven Asset, Approaching $85,000

As the dollar weakens, and traditional markets falter, Bitcoin is consolidating its position as a safe haven amid economic uncertainty. Is it ready to break the key resistance at $85,500?

Bitcoin posted modest gains of 1.74% this Monday, closing at $84,010 and reaching a high of $84,756, following weak US retail sales data. The dollar weakened, and investors turned to the cryptocurrency as a safe haven asset. Although the retail sales data showed a recovery (0.2%), it fell short of the forecast (0.6%), reflecting a still-fragile economy. Meanwhile, Bitcoin's open interest rose 2.42% to $49.35 trillion, signaling a return of traders to the market.

The price of Bitcoin is facing dynamic resistance at the 200-day exponential moving average (EMA200), located at $85,500. / Tradingview

Bitcoin as a Safe Haven in the Face of Dollar Weakness

This Monday, Bitcoin once again demonstrated its ability to act as a safe haven asset in times of economic uncertainty. The cryptocurrency rose 1.74%, closing at $84,010 and reaching an intraday high of $84,756. This upward movement followed the release of disappointing US retail sales data, which showed 0.2% growth in March, below the 0.6% forecast. Although this figure represents an improvement over the -1.2% the previous month, it is still insufficient to boost confidence in the economy.

The dollar, meanwhile, weakened following the report, benefiting Bitcoin by increasing its appeal as an alternative to traditional currencies. Investors appear to be seeking refuge in decentralized assets amid the possibility of a more pronounced economic slowdown.

Retail Sales: A Warning Sign for the Economy?

Retail sales data (Retail Sales MoM) is a key indicator of consumer spending, which accounts for a significant portion of US GDP. The modest growth of 0.2% suggests that while the economy is showing some resilience, consumers continue to face pressures such as high inflation, higher interest rates, and economic uncertainty.

This mixed scenario could lead the Federal Reserve to maintain a cautious stance at its next meeting on Wednesday. While the interest rate is expected to remain at 4.50%, traders will be watching Fed Chairman Jerome Powell's remarks for signs of possible rate cuts in the future.

Bitcoin: Consolidation with a Bearish Bias

According to data from CheckonChain, Bitcoin's Realized Profit/Loss Momentum indicator offers a clear view of short-term market behavior. Currently priced at $82,500, Bitcoin is at a key level that could act as support or resistance. The Loss Momentum of 1.8122 indicates significant selling pressure on losing positions, suggesting slightly bearish sentiment.

Furthermore, the Profit Momentum of 0 reflects that investors are not aggressively taking profits, which could be interpreted as a sign of confidence in future upside. However, the -ve Momentum near 1 (0.9997) confirms that the market is in a state of consolidation with a slight downward bias.

Rising Open Interest: A Sign of Increased Liquidity?

Bitcoin's Open Interest (OI) has rebounded 2.42% in the past 24 hours, reaching $49.35 billion. This increase indicates that traders are reopening speculative positions, both long and short, increasing liquidity in the cryptocurrency market. Since March 10, when OI hit a four-month low, this indicator has maintained an upward trend.

Key Resistance: Can Bitcoin Surpass $85,500?

The Bitcoin price is facing dynamic resistance at the 200-day exponential moving average (EMA200), located at $85,500. However, the low trading volume in the current momentum weakens its ability to break through this key level. Furthermore, the "death cross" between the EMA50 and EMA100 suggests a possible price decline in the short term. To avoid a broader bear market, Bitcoin would need to break through the resistance at $85,500 and test the next level at $90,300.

Amid economic uncertainty and a weak dollar, Bitcoin is consolidating as an attractive safe haven asset for investors. Although the market shows a slight bearish bias in the short term, rising open interest and the confidence of long-term holders could fuel a new bullish phase. However, everything will depend on Bitcoin's ability to break through the key resistance at $85,500 in the coming days.

Disclaimer: The information provided in this article is for informational purposes only and does not constitute financial, investment, or trading advice. Do your research and consult a professional. before making financial decisions.