Bitcoin flirts with $30,000, a key level to regain upside momentum

Bitcoin flirts with $30,000, a level that it managed to reach for a few hours and that is key to regain its upward momentum. However, the cryptocurrency fails to settle in that area and is currently, on Wednesday, hovering around $29,700.

"Bitcoin´s price has been interesting in light of Fitch's downgrade of US regional banks, but that momentum appears to be fading once again, as the price is really struggling to climb back above the 50-day average," they stated at Zaye Capital Markets.

The analysts added that the US CPI data due out tomorrow, on Thursday "will be an important economic number to watch, as inflation readings tend to drive Bitcoin´s price. If inflation continues to slow, we could see weakness in the dollar index, which could drive Bitcoin´s price higher, but again, the whole move could also be capped, as Bitcoin is naturally considered a hedge against inflation due to its limited supply."

For the moment, on Wednesday, the quintessential cryptocurrency is recovering, but for now it remains stuck below the $29,800 resistance zone. This is precisely a level that it needs to retake as support to return to the range between $29,800 and $31,500, as experts pointed out.

In fact, the trader who caught the 2023 crypto rally believes Bitcoin´s trend has shifted to the bearish side. And he stressed that it must close the week above $30,000 to regain its upside momentum.

"Despite Bitcoin's sideways path between the $31,800-$28,400 levels, we are starting to see sentiment return to the markets noticeably," they commented from XS.com.

In their view, "the increase in the number of open positions reflects a more positive sentiment among investors with more recognition of either the importance of cryptocurrencies as a means of settling payments or their importance as an investment." On the other hand, "current or future regulatory restrictions and demands and their developments remain the most prominent negative factors that may put pressure on digital currency markets in general."