Bitcoin faces fresh pressure as US dollar crushes gold, risk assets

As the U.S. dollar surged higher, Bitcoin (BTC), fell to daily lows on July 5, Wall Street Open.

BTC/USD 1-hour candle charts (Bitstamp). Source: TradingView

USD sets another record for 20 years

Data from TradingView and Cointelegraph Markets Pro showed that BTC/USD fell to $19,281 at Bitstamp after the Independence Day weekend ended with a bump.

Although the pair had experienced last-minute gains in the previous day, they were quickly wiped out by the USD strength that accompanied Wall Street trading. This stifled gains across risk assets as well as safe havens.

Bitcoin fell $1,000, spot gold lost over 2%, and the U.S. equity markets also fell. At the time of writing, the S&P 500 was at 2.2%. The Nasdaq Composite Index fell 1.7%.

1-hour candle chart for XAU/USD Source: TradingView

On the other hand, the U.S. dollar Index (DXY) reached 106.59. This is a new level that has not been seen since December 2002, and it was higher than previous breakouts in Q2 of this year.

Bitcoin analysts waited therefore for signs that a trend would reverse to offer some relief to crypto markets.

Waiting for Dollar Crash $DXY pic.twitter.com/HaKXIM3OFB
— July 5, 2022, Trader_J (@Trader_Jibon).

“Euro at record levels, $1.033 at the moment. The euro was last seen in 2002-2003, and $DXY, of coarse, shooting up like rockets,” Michael van de Poppe, a Cointelegraph contributor, commented. He noted that the euro was moving towards USD parity.

Caleb Franzen from Cubic Analytics, senior market analyst, added commentary on how the DXY revealed investor sentiment about the economic health.

“In the last week, yields have fallen but the dollar has risen.” This shows that investors are running to safety with increased fears of recession,” a tweet said.

The 1-month candle chart of the U.S. dollar Index (DXY). Source: TradingView

Crypto Fear & Greed Index reaches 2-month high

Although volatility returned to crypto markets, sentiment did not reflect the effects of a rampant Dollar.

Related: Is the price of BTC lower than ‘Wild Ride’? Five things you need to know about Bitcoin this week

The Crypto Fear & Greed Index was at 19/100 that day, which is still indicative of “extreme terror” but its highest reading since May’s Terra LUNA disaster.

Screenshot: Crypto Fear and Greed Index Source: Alternative.me

Cointelegraph also reported that ARK Invest, an investment manager, said it was still “neutral or positive” regarding BTC in current circumstances.

Analyzing Bitcoin futures markets sentiment, Edris, a contributor of on-chain analytics platform CryptoQuant voiced caution over making any type of recovery.

Edris demonstrated that the taker buy/sell ratio, which shows whether sellers or buyers are in control, saw some relief, but should still be considered cautiously.

“However, it could be a consolidation of a bullish drawback before another continuation lower,” a blog entry read.

“So, it is important to consider many other factors in the coming weeks so that you can determine if there will be a bullish reversal of another bull trap.”

Annotated chart showing the bitcoin taker buy/sell ratio. Source: Edris/ Twittercom. You should do your research before making any investment or trading decision.

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Eileen Wilson

Eileen Wilson –Technology and Energy My Name is Eileen Wilson with more than 5 years of experience in the Stock market industry, I am energetic about Technology news, started my career as an author then, later climbing my way up towards success into senior positions. I can consider myself as the backbone behind the success and growth of topmagazinewire.com with a dream to expand the reach out of the industry on a global scale. I am also a contributor and an editor of the Technology and Energy category. I experienced a critical analysis of companies and extracted the most noteworthy information for our vibrant investor network.

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