Bitcoin is trading in an extremely tight area with little volatility, between highs of $19,000 and $22,000,000. Although the cryptocurrency has found critical support, macroeconomic risks could push it to new lows.
Bitcoin (BTC), which trades at $19,000. There has been a loss of 1% and 8.8% in the past 24 hours, and seven days respectively. The cryptocurrency’s performance has been affecting the entire sector as Ethereum (ETH), Binance Coin (BNB), and another retrace to early August levels.
The battle between bulls vs bears becomes more apparent at these volatile levels. Bitcoin’s August Monthly Candle was closed at the critical support level, which could lead to some relief.
But, there is an immediate risk that the U.S. dollars might be a hurdle to assets with high exposure. A crypto analyst has provided data that indicates the currency may have broken through an important resistance, and could make another run to levels last seen in 2003.
The DXY Index shows that the U.S. Dollar has broken the resistance level at 109, and may move to a multiyear high of 112, before testing previous levels. A daily candle close is required to confirm the breakout. However, it appears likely that this trend will continue as long as dollar consolidates below resistance.
According to crypto analyst Justin BennettThis U.S. Dollar rally is a threat to digital assets
Argument against risk assets rally is $DXY. It is currently breaking above 109.30. Crypto must cool down before it can rally. It is the daily close that matters. All else is just noise.
For risk-on assets such as Bitcoin, the U.S. Dollar has always been an obstacle. Investors are fleeing to the cryptocurrency in order to escape financial uncertainty.
Bitcoin And Equities on The Ropes
In that sense, traditional equities, positively correlated with Bitcoin and crypto, have been re-testing local support over today’s trading session. The S&P 500 is testing the 3,900-support presenting a falling wedge pattern that Bennett believes could provide room for crypto and stock relief bounce.
The expert expects a spike in volatility, a potential decompression from this week’s slow price action, as the U.S. will publish its Non-Farm Payrolls (NFP). NewsBTC yesterday reported that this metric, along with the Consumer Price Index (CPI), will determine a large number of future Fed decisions.
The analysis by QCP Capital shows that if the NFP falls short of market expectations, then the U.S. financial institution may be able hint at less aggressive monetary policies. This could help to sustain the bullish momentum of Bitcoin and the cryptocurrency market.
