Bitcoin (BTC) falls, Crypto Outlook falters on dollar strength

Bitcoin and Ethereum was under pressure Tuesday night when the global market value of cryptocurrency fell 1% to $ 904.9 billion.

See also: How to get free crypto

Why it matters: Cryptocurrencies continue to maintain their inverse relationship with the dollar.

On Tuesday, the dollar index, which measures the strength of the US unit against a six-currency basket, rose 1.3% after hitting its highest level since December 2002, despite fears of a looming recession, Reuters reported.

“Demand for the security of dollar-based assets is high as expectations of economic activity are significantly lower,” he said. Shawn Cruz, the chief trading strategist at TD Ameritrade in Chicago, according to Reuters.

GlobalBlock analyst Marcus Sotiriou said in a note that “Dollar strength causes Bitcoin weakness.” Another negative for cryptocurrencies has been the withdrawal of liquidity, according to Sotiriou.

“Bitcoin will remain all-time high in 2017, which is worrying for bulls. They [Terra Classic (LUNC) ] and [TerraClassicUSD (USTC)] The crash has led to a tragic contagion among other crypto companies, as we have seen liquidity pulled out of the crypto market at an extraordinary rate. “

Cryptocurrency trader Justin Bennett said the dollar index closed above a significant multi-year level in June and on Tuesday touched new 20-year highs.

Many people will not like this, but …

The $ DXY closed above a significant multi-year level in June, and today we see new 20-year highs from the dollar index.

All signs point to 120, indicating another 12-20 months of suppressed movement from stocks and #krypto. $ SPY $ BTC $ ETH pic.twitter.com/7WC8srj8bO

– Justin Bennett (@JustinBennettFX) July 5, 2022

“All signs point to 120, indicating another 12-20 months of suppressed movement from stocks and [cryptocurrencies]. “

Michael van de Poppe Expect that Bitcoin will consolidate and then break the next resistance zone and then continue to the $ 23,000 level.

This cracked the resistance and ran towards the next resistance range of $ 20.3K.

I expect #Bitcoin to consolidate a bit here, but breaking the next resistance zone is a trigger for continuation towards $ 23K and a summer relief rally. pic.twitter.com/DnQHcCL3dF

– Michaël van de Poppe (@CryptoMichNL) July 5, 2022

Van de Poppe noted the strength of the dollar index, but said that it was also matched on the equities side.

The first time we see such an improvement after a serious correction + strength on $ DXY.

Strength of stocks as well.

Would not be surprised if this continues in the coming period, despite the fact that the general feeling is ultra bearish.

– Michaël van de Poppe (@CryptoMichNL) July 5, 2022

“The first time we see such an improvement after a serious correction + strength [dollar index]. “

“Would not be surprised if this continues in the coming period, despite the fact that the general feeling is ultra bearish,” said the cryptocurrency trader.

The S&P 500 and Nasdaq closed 0.2% and 1.75% higher on Tuesday, respectively. Their futures were up 0.2% and 0.3% respectively at the time of press.

Calculations on the chain indicate that the Bitcoin supply in losses has reached 48.1% of all coins held off exchanges. Of these Bitcoins in losses, 60% of them are held by long-term holders, tweeted Glassnode.

The proportion of #Bitcoin supply at a loss has reached 48.1% of all coins held off exchanges.

Of these $ BTC in losses, almost 60% of therm is owned by long-term owners (28.6% of total).

Both calculations are at similar levels as the capitulation phases in November-December 2018 and March 2020. pic.twitter.com/sCLnAWEQ1Y

– glassnode (@glassnode) July 5, 2022

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Photo via Stepan Kapl on Shutterstock