Bitcoin price hits daily low of $18,840 as dollar continues to strengthen
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(Kitco News) – Traders in the crypto market experienced a brief period of price gains early Tuesday before bottoming out as concerns that the Federal Reserve’s rate hike campaign to fight inflation will result in an economic downturn.
Chicago Fed President Charles Evans sought to ease those concerns while speaking at a forum in London, saying the U.S. central bank will need to raise interest rates by at least another percentage point this year but does not see the labor market heading into “recession – equal” conditions.
Despite these assurances, global markets trended lower on Tuesday afternoon, with the Nasdaq closing a minimal gain of 0.25% while the S&P and Dow closed down 0.21% and 0.43% respectively.
Data from TradingView shows that Bitcoin (BTC) briefly climbed above the $20,000 support in the early hours, only to return to a daily low of $18,840 in the afternoon trading session before bulls arrived to bid back above the $19,000 support.
BTC/USD 4-hour chart. Source: TradingView
This early morning upward move was addressed in the morning Bitcoin update by senior Kitco technical analyst Jim Wyckoff, who noted that “BC bulls have gained some upside momentum early this week, but need to show more strength to break the price decline in place on the daily bar chart. »
Wyckoff’s warning to bulls was prescient, but they failed to follow through as seen by the move lower in the afternoon. As it stands, “bears still have the slight overall technical advantage in the near term,” according to Wyckoff.
Traders are fleeing the falling pound
Insight into the source of weakness across all financial markets, not just crypto, was provided by independent market analyst and pseudonymous Twitter user Crypto Tony, who posted the following tweet warning that “the dollar hasn’t quite topped out yet.”
Bad news for #Bitcoin pump, the dollar hasn’t quite peaked yet, so we’re looking for more pumps on the dollar and pullbacks on $BTC
Keep an eye on both of these if you plan to exploit BTC pic.twitter.com/wW85LG0O4o
— Crypto Tony (@CryptoTony__) 27 September 2022
And it’s not just BTC that the strong dollar is affecting as the value of the British pound plunged, with the GBP/USD pair hitting $1.03, its lowest ever. This in turn has triggered a wave of BTC buying by holders of the pound who want to preserve their purchasing power.
According to data made sure of by James Butterfill, head of research at CoinShares, trading volume for the GBP/BTC pair on exchanges Bitstamp and Bitfinex, which typically sees a combined daily volume of $70 million, increased to $881 million on September 26 – an increase of over 1,150% .
It would not be surprising to see a similar increase in buying activity by holders of other fiat currencies looking for alternatives but not interested in holding the dollar.
Altcoins follow Bitcoin’s lead
Overall, the afternoon slump hit the crypto market hard, leaving all but stablecoins in the red for the day, for the most part.
Daily performance in the cryptocurrency market. Source: Coin360
The most notable winners of the top 200 according to data from CoinMarketCap were an 8.84% increase in reserve rights (RSR), an 8.17% increase for STEPN (STEPN) and a 7.45% price increase for Polymath ( POLY).
The total cryptocurrency market cap is now $929 billion, and Bitcoin’s dominance rate is 39.3%.
Disclaimer: The views expressed in this article are those of the author and may not reflect the views of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is for informational purposes only. It is not an invitation to exchange goods, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept responsibility for any loss and/or damage arising from the use of this publication.
