Bitcoin meets new pressure when US dollar crushes gold, risk assets
Bitcoin (BTC) reached daily lows at the Wall Street opening on July 5 when the US dollar saw a sharp rise.
The USD sets another 20-year record
Data from Cointelegraph Markets Pro and TradingView showed that BTC / USD retreated to $ 19,281 on Bitstamp when Independence Day’s long weekend ended with a shock.
The couple had an upturn at the last minute The day before, these were bubbling as Wall Street trading returned, accompanied by USD strength destroying gains across risky assets and safe havens.
Bitcoin traded down $ 1000 on the day, while spot gold fell over 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 lost 1.7%.
The US Dollar Index (DXY), on the contrary, hit 106.59, a level not seen since December 2002 and above previous eruptions from Q2 this year.
Bitcoin analysts were therefore waiting for signs of a trend reversal to provide some relief to the crypto markets.
Awaiting Dollar Crash $ DXY pic.twitter.com/HaKXIM3OFB
– Trader_J (@Trader_Jibon) July 5, 2022
“Euro reaches record levels, $ 1,033 at this point. Last seen in 2002-2003 and DXY, of course, launches like a rocket,” Cointelegraph contributor Michaël van de Poppe commentedand noticed that the euro was heading for USD parity.
In additional comments, Caleb Franzen, senior market analyst at Cubic Analytics, pointed out how DXY highlighted investor sentiment over the health of the economy.
“Over the past week, interest rates have been falling, but the dollar continues to rise. This dynamic proves that investors are rushing to safety, with increased fears of recession,” part of a tweet read.
Crypto Fear & Greed Index reaches 2 months high
While volatility returned to the crypto markets, sentiment was yet to reflect the impact of a lush dollar.
Related: ‘Wild ride’ lower for BTC? 5 things to know in Bitcoin this week
The Crypto Fear & Greed Index stood at 19/100 on the day, still an indication of “extreme fear”, but nonetheless the highest measurement since before the Terra LUNA debacle in May.
As Cointelegraph also reported, investment manager ARK Invest revealed that it was still “neutral to positive” on BTC in the current circumstances.
Analyzing Meanwhile, Edris, a contributor to the chain analysis platform CryptoQuant, expressed caution in drawing conclusions about any form of recovery.
The buyer / seller ratio, which indicates whether buyers or sellers are in control, saw some relief on the day, Edris showed, but the move should be taken with a pinch of salt.
“But be aware that there may only be a consolidation or a bullish withdrawal before another continuation lower,” it said in a blog post.
“So many other factors should be considered carefully in the coming weeks to determine if a bullish reversal or another bull trap can be expected.”
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