Bitcoin (BTC) reached a daily low on July 5 Wall Street opened as the U.S. dollar saw a higher violent surge.
The USD set another 20 -year record
At the couple has seen last minute results the day before, this was fizzling as the return of Wall Street trading was accompanied by the strength of the USD laying waste to the right outcome of risk assets and a safe haven.
Bitcoin traded down $ 1,000 on the day, while spot gold dropped more than 2% and the U.S. equity market also collapsed. The S&P 500 is down 2.2% at the time of writing, while the Nasdaq Composite Index is down 1.7%.
The US dollar index (DXY), in contrast, kenek 106.59, a level not seen since December 2002 and above previous breakouts from Q2 this year.
Bitcoin analysts are thus waiting for signs of a trend reversal to provide some relief for the crypto market.
– Trader_J (@Trader_Jibon) July 5, 2022
“The euro reached a record level, $ 1,033 at this point. It last appeared in 2002-2003 and the DXY, of course, picked up like a rocket,” Cointelegraph contributor Michael van de Poppe commentnoted that the euro is heading towards USD parity.
In additional comments, Caleb Franzen, senior market analyst at Cubic Analytics, pointed out how DXY informs investor sentiment about the health of the economy.
“Over the past week, yields have been down but the dollar continues to rise. These dynamics prove that investors are rushing to safety, with fears of a recession,” part of the tweet read.
Crypto Fear & Greed Index reached a 2 -month high
While volatility has returned to the crypto market, sentiment has yet to reflect the impact of a very strong dollar.
Crypto Fear & Greed Index stand at 19/100 on the day, still indicative of “extreme fear” but nonetheless the highest reading since before the Terra LUNA debacle in May.
In addition Cointelegraph reported, ARK Invest’s investment manager said it was still there “neutral to positive” in BTC in the current situation.
Analyze Bitcoin futures market sentiment, meanwhile, Edris, a contributor to on-chain analytics platform CryptoQuant, expressed caution about drawing conclusions about all forms of recovery.
The taker buy / sell ratio, which shows whether the buyer or seller is in control, saw some relief in the day, Edris points out, but the move should be taken with a pinch of salt.
“However, keep in mind that it could be a consolidation or a bullish retreat before another lower resumption,” the blog post. read.
“So, there are many other factors that need to be considered closely in the coming weeks to determine whether a bullish reversal or another bull trap can be expected.”
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