Bitcoin Takes Liquidity Near $17K As US Dollar Shows Weakness Before CPI
Bitcoin (BTC) hovered below $17,000 at the Wall Street open on December 8 as the US dollar threatened further weakness.
Dollar falls as stocks see modest gains
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD practically flat in the 24 hours to the time of writing.
With macro cues missing, analysts saw a potential breakdown in US dollar strength as the next volatility catalyst for crypto and risk assets.
The US dollar index (DXY) looked set to challenge multi-day support, dipping below 105 several times on the day.
“$DXY’s first time below 100-day MA since June ’21,” Joe Cariasare, co-host of the Inside Bitcoin podcast, noted.
Trader and analyst Pierre added that both the DXY and S&P 500 could still trade sideways until November’s consumer price index (CPI) comes in on December 13.
The event, as Cointelegraph reported, is a classic temporary volatility trigger.
“Meanwhile, both the SPX and DXY are still hovering around their respective D1 200 EMAs,” comments the chart read.
“DXY turned resistance so far, while SPX is sitting on D1 uptrend, important level to defend. Both look like all they want is more and more notches to next week’s CPI.”
On BTC/USD, popular trader Daan Crypto Trades expected the trading range to widen and absorb liquidity both above and below spot.
“$BTC In a very tight range here with tons of untapped highs and lows,” he told Twitter followers.
“I think all those levels will be taken out and that the first move will probably be a fakeout only to go back and take the other side. Would definitely be a classic Bitcoin move.”
‘Final Phase’ of Bitcoin Bear Market?
Further modest tailwinds came from US stocks during the first hour of trading on Wall Street.
Related: GBTC ‘Elevator to Hell’ Sees Bitcoin Spot Price Approaching 100% Premium
The S&P 500 was up 1% at time of writing, while the Nasdaq Composite Index was 1.2% higher. The move went some way to replicating a day of relief in Asia, where trade ended with Hong Kong’s Hang Seng 3.4% higher.
Looking at longer time frames, the picture remained bearish on Bitcoin for many.
Popular commentator Byzantine General declared the likely start of the bear market’s darkest phase in 2022.
“Perps volume is in a pretty strong downtrend now. Market decline, speculators are capitulating,” he wrotereferring to perpetual futures markets.
“We are probably entering the final phase of the bear. But the final phase could last quite a long time.”
Data from Coinglass additionally showed open interest in futures continuing to decline.
The views, thoughts and opinions expressed herein are those of the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
