Bitcoin (BTC) faced familiar pressure on the Sep. 1 Wall Street open as the U.S. dollar hit fresh two-decade highs.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
Trader: DXY could hit 115 before ‘slowdown’
The pair faced stiff resistance trying to flip the important $20,000 mark to solid support, with macro cues further complicating the picture for bulls.
That came in the form of a resurgent U.S. dollar index (DXY) on the day, which beat previous peaks to reach 109.97, its highest since September 2002.
U.S. dollar index (DXY) 1-day candle chart. Source: TradingView
Risk assets thus broadly lost ground, with the S&P 500 and Nasdaq Composite Index trading down 1% and 2%, respectively at the time of writing.
“DXY with another strong day,” popular crypto trading account Kaleo summarized on Twitter.
“Honestly see zero signs of it wanting to slow down until ~114/115, which at this rate should take at least a couple of months.”
Other commentators, including crypto account TXMC Trades, noted the declining Japanese yen as an additional dollar booster. USD/JPY hit 140.21, marking its highest since August 1998.
RSI divergence traders in disbelief with $DXY bull continuation. It’s almost as if RSI is a bounded oscillator and should not be used for regular divergence
– Cheds (@BigCheds) September 1, 2022
“Dollar at levels last seen in 2002. Key time here it seems. Bulls need a reversal. Bears need a break out,” NorthmanTrader founder, Sven Henrich added, noting that the DXY relative strength index (RSI) was “very stretched.”
Further clouds on the horizon meanwhile made Sep. 15 a key date in crypto traders’ diary.
Just days after the August Consumer Price Index (CPI) inflation print would be due, payouts as part of the Mt. Gox rehabilitation process would begin after years of legal work.
Creditors would thus start to receive a share of almost 140,000 BTC, last traded at a price below $500 a coin.
While the resulting selling pressure is a topic of debate, the launch coincides with the Ethereum Merge, where the largest altcoin by market cap jettisons Proof-of-Work for Proof-of-Stake as its consensus algorithm.
What could go wrong? pic.twitter.com/Ha5rBnpSxx
– Justin Bennett (@JustinBennettFX) August 31, 2022
Cold feet reigned supreme across crypto sentiment on the day, captured by the Crypto Fear & Greed Index falling to 20/100 – its lowest since July 18 and corresponding to “extreme greed.”
Crypto Fear & Greed Index (screenshot). Source: Alternative.me
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