Bitcoin rejects $40K as US dollar strength hits 20-year high

Bitcoin (BTC), which was attempting to break $40,000, made a new bid on April 28th as Wall Street trading opened at twenty-year highs for U.S. Dollar strength.

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

DXY in “parabolic rally”.

Cointelegraph Markets Pro and TradingView data showed that BTC/USD hit highs of $39883 on Bitstamp, but momentum waned and sent the pair $800 lower over the next hour.

Traders saw a relief bounce and predicted that the rejection would continue the downtrend.

It was a day of caution.

“BTC is currently consolidating in the falling wedge. If there is a breakout, I would target $42K. “It’s best to wait until confirmation before you decide to trade imo,” Daan Crypto Trades, a popular Twitter account, stated.

Crypto Ed, a fellow trader, said that only a strong break or reclaim of $40.6k would lead him to look at higher targets.

“Charts: pointing lower. Liquidity is a squeeze to the upside in order to hunt the shorts.

While Bitcoin’s movement was limited, attention was primarily on the dollar. The dollar currency index (DXY), which measures the U.S. dollar’s performance against its peers, reached its highest level since 2002.

U.S. dollar currency indicator (DXY), 1-month candle chart. Source: TradingView

“The parabolic rally of DXY is not good news for risk-on assets such as stocks and Bitcoin. Benjamin Cowen, a commentator, warned that defense should be your best option until the rally slows down.

Others agreed that DXY was “parabolic” while Blockchain Backer, a trading guru, saw similarities between DXY’s current setup and other currencies. He also noted similarities between DXY’s current setup and the period immediately following the March 2020 COVID-19 Cross-asset crash.

The U.S. Dollar Currency Index is (DXY), on the rise and parabolic. I began to look at other currencies and started looking at the Euro (EURUSD) Then I realized… This is what I have seen before. This is how the bottom looked in crypto markets before the huge reversal that occurred after C-19. pic.twitter.com/M8uxBYZXX0
— April 28, 2022, Blockchain Backer (@BCBacker).

The theory is that Bitcoin should feel some relief if the USD trajectory changes. Michael van de Poppe, a Cointelegraph contributor, predicts it will do “really well” under such circumstances.

nalyst – USD will collapse in the upcoming “major currency crises”

Concerns about the potential knock-on effects of the USD’s exploding currency were also being raised.

Related: Ex-BitMEX CEO explains why Bitcoin will reach $1 million by 2030

Instability could bring back risk assets that are already subject to central bank anti-inflation policies. Ironically, Japan could be the catalyst, as the central bank continues printing money.

Brent Johnson, CEO at Santiago Capital, predicted Wednesday that chaos would follow no matter which way Yen moves from here.

“If capital flows into Japan and it retraces to the support line it is a drag on funds allocated to the rest of the world. If it continues to dive, it puts pressure on the PBOC for the Yuan to also fall. Neither of these options are good

On the same day, the Japanese yen traded at 20-year lows.

What do Keynesian investors do when faced with a crisis?” They jump into the $ believing it is safety,” Alasdair Mcleod, head research at precious metals trading company Goldmoney, said.

“Nearly all money managers and investors have been brainwashed to believe this since the Nixon shock. The JPY’s slide is accelerating this morning.”

Macleod predicted a “major currency crise” that would engulf the dollar’s strength as it followed the fates of the euro, yen and pound sterling.

Chart of JPY/USD for 1-month. Source: TradingViewcom. 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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