Bitcoin Faces Uncertainty as US Dollar Index Soars

Bitcoin faces uncertainty as the US Dollar Index reaches its highest level since 2022, potentially impacting crypto market performance.

Posted 8 months ago in Market Analysis

Bitcoin symbol with a US Dollar symbol in the background

Bitcoin (BTC) hugged $26,000 at the Sept. 24 Wall Street open as a weekly close “nosedive” brought lasting consequences. Data from Cointelegraph Markets Pro and TradingView showed BTC price trajectory uncertain after briefly piercing $26,000 support. Sideways weekend trading soon turned sour into the new week, and upset overnight meant that bulls were unable to recoup lost ground.

“Bitcoin failed to break through local resistance in the form of a descending trend line, and it looks like a little bearish right shoulder may form,” analyst BaroVirtual, an ambassador for on-chain data platform Whalemap, summarized. BaroVirtual uploaded a daily chart snapshot on social media, showing a potential head-and-shoulders formation about to conclude. “If true, BTC risks falling into the $22,000-$20,000 range,” they added.

That perspective chimed with others already expecting a return toward the $20,000 mark — something absent from the BTC price charts for six months. Popular trader and analyst Rekt Capital, who previously envisaged the possible reappearance of the low $20,000s as part of a breakdown from a double-top structure, now placed emphasis on holding current levels as support. “Bitcoin could downside wick into the ~$25000-$26000 area on this current move down,” he wrote in part of fresh analysis on Sept. 25. An accompanying chart laid out the key levels.

Macro markets, meanwhile, opened to another potential headwind for Bitcoin and crypto — an unrelentingly strong U.S. dollar. The U.S. Dollar Index (DXY) continued its march higher, hitting 106.1 — its highest since November 2022. Since hitting 15-month lows in July, the DXY has climbed 6.5%, displaying strength, which historically has hampered risk asset and crypto market performance.

“DXY rocketing higher - to the detriment of BTC Crypto and other risk assets,” Matthew Dixon, CEO of crypto rating platform Evai, wrote in part of a reaction. Dixon had previously eyed a potential cooling off in DXY strength, giving Bitcoin and altcoins room for a relief bounce.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Last updated 9/25/2023, 12:18:31 PM


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