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Bitcoin (BTC) passed $20,400 for the first time this month on Sept. 2 as United States economic data outperformed expectations.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

Declining dollar accompanies BTC price rebound

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD approaching $20,500 after the Wall Street open, marking new highs for September.

The pair had responded well to U.S. non-farm payroll data, which in August showed inflows dropping less than expected.

A further boost came from news that the G7 had agreed to implement a price cap on Russian oil, with the European Union also planning to target the country’s gas imports.

While the S&P500 and Nasdaq Composite Index both added 1.25% after the first hour’s trading, the U.S. dollar conversely fell in step, looking set to dive below 109 at the time of writing.

U.S. dollar index (DXY) 1-hour candle chart. Source: TradingView

Bitcoin thus inched closer to an area around $20,700, already being eyed as a launchpad for a short squeeze — a liquidation of short positions providing a swift spike higher for spot price.

In a tweet on the day, popular trading account Daan Crypto Trades showed that a low-liquidity area remained overhead, likely not providing much resistance.

“White area is quite thin in terms of recent volume profile,” part of commentary on an accompanying chart read.

“Should move through that area with relative ease.”

Summarizing the short-term plan in his latest YouTube update, meanwhile, fellow trader Crypto Ed painted a target at near $20,700.

“Extreme capitulation” is here, say multiple metrics

Looking at the longer-term perspective, two analysts meanwhile insisted there was reason to stay bullish on current price action.

Related: The total crypto market cap continues to crumble as the dollar index hits a 20 year high

Twitter trader Alan noted similarities to the 2015 bear market, and argued that if history were to repeat, BTC/USD should be about to bottom out.

Popular account Plan C contrasted realized losses in USD with Bitcoin’s market cap to produce an index of “extreme capitulation.”

The result concluded that only at the pit of Bitcoin’s 2018 bear market was capitulation stronger than at present.

A series of further on-chain indicator posts from Plan C on the day furthered the concept that current market behavior was echoing macro bear market bottoms.

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