There seems to be no stopping the greenback as risk assets, including Bitcoin, pay the price for renewed strength.
Bitcoin (BTC) faced familiar pressure on the Sept. 1 Wall Street open as the U.S. dollar hit fresh two-decade highs.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
Trader: DXY could hit 115 before ‘slowdown’
The pair faced stiff resistance trying to flip the important $20,000 mark to solid support, with macro cues further complicating the picture for bulls.
That came in the form of a resurgent U.S. dollar index (DXY) on the day, which beat previous peaks to reach 109.97, its highest since September 2002.
U.S. dollar index (DXY) 1-day candle chart. Source: TradingView
Risk assets thus broadly lost ground, with the S&P 500 and Nasdaq Composite Index trading down 1% and 2%, respectively at the time of writing.
“DXY with another strong day,” popular crypto trading account Kaleo summarized on Twitter.
“Honestly see zero signs of it wanting to slow down until ~114/115, which at this rate should take at least a couple of months.”
Other commentators, including crypto account TXMC Trades, noted the declining Japanese yen as an additional dollar booster. USD/JPY hit 140.21, marking its highest since August 1998.
RSI divergence traders in disbelief with $DXY bull continuation. It’s almost as if RSI is a bounded oscillator and should not be used for regular divergence
— Cheds (@BigCheds) September 1, 2022
“Dollar at levels last seen in 2002. Key time here it seems. Bulls need a reversal. Bears need a break out,” NorthmanTrader founder, Sven Henrich added, noting that the DXY relative strength index (RSI) was “very stretched.”
Further clouds on the horizon meanwhile made Sept. 15 a key date in crypto traders’ diary.
Creditors would thus start to receive a share of almost 140,000 BTC, last traded at a price below $500 a coin.
While the resulting selling pressure is a topic of debate, the launch coincides with the Ethereum Merge, where the largest altcoin by market cap jettisons proof-of-work for proof-of-Stake as its consensus algorithm.
What could go wrong? pic.twitter.com/Ha5rBnpSxx
— Justin Bennett (@JustinBennettFX) August 31, 2022
Cold feet reigned supreme across crypto sentiment on the day, captured by the Crypto Fear & Greed Index falling to 20/100 — its lowest since July 18 and corresponding to “xtreme greed.”
Crypto Fear & Greed Index (screenshot). Source: Alternative.me
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