As Wall Street opened on September 1, bitcoin (BTC) faced pressure as the US dollar hit new highs not seen in two decades.
Trader Says: DXY Could Hit 115 Before “Slowdown”
Data from Cointelegraph Markets Pro and TradingView tracked the BTC/USD pair falling to $19,658 on Bitstamp, down 2.7% from the day’s high.
The pair struggled to turn the crucial $20,000 mark into solid support, with macro indices further complicating the situation for bulls.
This resistance came in the form of a resurgence in the US Dollar Index (DXY), which broke above previous highs to reach 109.97. This is the highest level since September 2002.
Risk assets have therefore largely lost ground, with the S&P 500 and Nasdaq Composite Index trading down 1% and 2% respectively at the time of writing.
“DXY another strong day,” said abstract the popular Kaleo cryptocurrency trading account on Twitter.
“Honestly, I don’t see any signs of him wanting to slow down to ~114/115, which should take at least two months at this rate.”
There are other commentators, including the TXMC Trades cryptocurrency account Note the fall of the Japanese yen as an additional boost to the dollar. USD/JPY reached 140.21. This is the highest level since August 1998.
RSI diversity traders in disbelief with $DXY follow bull. It is almost as if RSI is a bounding oscillator and should not be used for regular variation
—Cheds (@BigCheds) September 1, 2022
Traders using the RSI divergence are in disbelief about the continued rise of $DXY. It is almost as if the RSI is a bounding oscillator and should not be used for regular variation. — Cheds (@BigCheds) September 1, 2022.
“The dollar is reaching levels not seen since 2002. The bulls need a retreat. The bears need a breakout.” added Sven Henrich, founder of NorthmanTrader, noting that the Relative Strength Index (RSI) of the DXY was “very stretched”.
There are more clouds on the horizon after September 15 became a key date on the cryptocurrency agenda.
Also Read: Bitcoin Mining Has Never Been More Competitive, Even When BTC Lost 13% In August
Just a day after the August Consumer Price Index (CPI) was released, payments will begin under the rehabilitation process for Mt.m Gox after years of legal work.
Thus, creditors would start receiving a share of almost 140,000 BTC, which last traded at a price below $500 per coin.
While the resulting selling pressure is debatable, the launch coincides with The Merge of Ethereum, where the largest altcoin by market capitalization abandons Proof of Work for Proof-of-Stake as a consensus algorithm.
– #Ethereum merge
– Mt. Gox #Bitcoin Release begins
What could go wrong? pic.twitter.com/Ha5rBnpSxx
— Justin Bennett (@JustinBennettFX) August 31, 2022
September 15: – The #Ethereum merge – Mt Gox #Bitcoin release begins. What could go wrong? pic.twitter.com/Ha5rBnpSxx — Justin Bennett (@JustinBennettFX) August 31, 2022.
Desire dominated cryptocurrency sentiment throughout the day, as reflected by the Crypto Fear & Greed Index falling to 20/100, the lowest level since July 18 and consistent with “great greed”.
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