Bitcoin price drops $23,000 on Pelosi Taiwan visit as trade range persists

by · August 2, 2022

Bitcoin (BTC) saw volatility after the Wall Street open on August 2 amid ongoing market reactions to US-China tensions.

BTC price U-turns as Pelosi lands in Taipei

Data from Cointelegraph Markets Pro and TradingView showed that BTC/USD surged above $23,000 on the day news broke that US House Speaker Nancy Pelosi had landed in Taipei, Taiwan following warnings of retaliation from Beijing.

The visit, which had raised concerns of a major incident, appeared to go off without a hitch – something an analyst at major banking giant JPMorgan had earlier said would trigger a market rally.

Both the S&P 500 and the Nasdaq Composite Index were slightly higher at the time of writing, reversing initial losses. Earlier, Asian markets had underperformed the uncertainty, with both the Shanghai Composite Index and Hong Kong’s Hang Seng losing around 2.3% on the day.

While traders saw an end to recent days’ lull in BTC, it remained to be seen whether key nearby trend lines would continue to hold see overnight retests.

“The next weeks/months in the Cryptocurrecny space are going to be volatile due to macro events playing a bigger role than ever,” popular trader Crypto Tony forecast.

Crypto Tony added that he would add to his allocation should BTC/USD break out of the $22,000-$24,000 range for lower levels.

This range was shared by fellow trader Credible Crypto, who nevertheless acknowledged the potential for a trip to $25,000 as well.

In a potential headwind for Bitcoin and risk assets, the US Dollar Index (DXY) capitalized on daily strength as events unfolded to aim for the 106 mark again.

The Bloomberg Dollar Index rose as did Pelosi became the first American speaker in Taiwan in twenty-five years.

US Dollar Index (DXY) 1 hour candlestick chart. Source: TradingView

Fib levels cap gains and losses for Bitcoin in Q3

While discussing the broader picture, trading firm QCP Capital confirmed that it did not expect Bitcoin to retest the 2022 lows of $17,600.

Related: Best Monthly Gains Since October 2021 – 5 Things to Know in Bitcoin This Week

“We expect BTC price to drift higher from here for most of Q3, with upside gains limited but also declines on choppy price action,” analysts wrote in the market summary released on Aug. 1.

However, beyond this time frame, QCP did not rule out a move to “break the lows” to officially end the current bear market. In “extreme” circumstances, it said, this could involve prices as low as $10,000.

A temporary pivot point, it added, could be a Fibonacci retracement level at $28,700.

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