Bitcoin faces fresh pressure as US dollar crushes gold, risk assets

189
SHARES
1.5k
VIEWS

Bitcoin (BTC) hits daily lows on July 5 on Wall Street as the US dollar sees violent gains.

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

USD sets another 20-year record

Data from Cointelegraph Markets Pro and TradingView shows BTC/USD retreated to $19,281 on Bitstamp as the long Independence Day weekend ended with a bounce.

READ ALSO

The pair had seen last-minute gains the day before, as Wall Street trading bounced back with the strength of the bullish US dollar doomed to profit in riskier assets and safe havens.

Bitcoin lost $1,000 on the day, while spot gold fell more than 2% and US stock markets also fell. The S&P 500 was down 2.2% at the time of writing, while the Nasdaq Composite Index dropped 1.7%.

XAU/USD 1-hour candle chart. Source: TradingView

The US Dollar Index (DXY), on the contrary, reached a level of 106.59. Not seen Above the previous breakout from December 2002 and from the second quarter of this year.

Thus bitcoin analysts wait for signs of a trend reversal to provide some respite to the crypto markets.

“Euro reached record level, $1.033 at this point. Last seen in 2002-2003 and $DXY, of course, shooting like a rocket,” said Cointelegraph contributor Michael van de Pope commentedGiven that the EUR was moving towards USD parity.

In additional remarks, Caleb Franzen, Senior Market Analyst at Cubic Analytics, explained how DXY sheds light on investor sentiment on the health of the economy.

“Over the past week, yields have been falling but the dollar is rising. This dynamic proves that investors are rushing to safety with bearish fears,” part of a tweet Reading,

US Dollar Index (DXY) 1 Month Candle Chart. Source: TradingView

Crypto Fear and Greed Index hits 2-month high

While volatility returned to the crypto markets, sentiment was still not there to reflect the impact of a larger dollar.

RELATED: ‘Wild Ride’ Short for BTC? 5 things to know about bitcoin this week

The Crypto Fear and Greed Index was at 19/100 that day, still a sign of “extreme fear”, but still its highest reading since the Terra Luna debacle in May.

Crypto Fear and Greed Index (screenshot). Source: Alternatives.me

As Cointelegraph additionally reported, investment manager ARK Invest revealed that it was still “neutral to positive” on BTC under the current circumstances.

analysis of Meanwhile, bitcoin futures market sentiment, Adris, a contributor to on-chain analytics platform CryptoQuant, cautioned about drawing conclusions on any sort of recovery.

The buyer buy/sell ratio, which indicates that buyers or sellers are in control, saw some relief that day, Adris showed, but the move should be taken with a pinch of salt.

“However, note that this could be just a consolidation or a bullish pullback before another continuation low,” read a blog post.

“Therefore, a number of other factors should be closely considered in the coming weeks to determine whether a bullish reversal or another bull trap can be expected.”
Annotated chart of buy/sell ratio taking bitcoins. Source: adris/twitter

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, so you should do your own research when making a decision.