Strength In U.S. Dollar May Have Killed Bullish Momentum In Crypto Market?
August 18 2022 - 4:39PM
NEWSBTC
The crypto market has been losing momentum as the price of Bitcoin
(BTC), Ethereum (ETH), and Binance Coin (BNB) start trading in the
red. The largest cryptocurrencies by market cap might experience
further losses as macro-economic factors keep exercising a negative
influence on risk-on assets. Related Reading: Ethereum Price Slides
As Staked Token Reaches New ATH Ahead Of Hyped Merge At the time of
writing, the crypto total market cap stands at $1.09 trillion after
experiencing rejection at the $1.2 trillion mark. This has led to
minor losses for Bitcoin (2.2%), and Binance Coin (7%), only
Ethereum has been able to preserve some of its last week’s gains.
Analyst Justin Bennett believes the crypto market has been
negatively impacted by the uptrend in U.S. dollars. The currency
saw a major push to the upside at the start of 2022 on its monthly
chart and seems to be attempting to reclaim 2022 levels on higher
timeframes. This could translate into more losses for risk-on
assets, such as equities and cryptocurrencies; more economic
uncertainty as inflation trends higher in decades; less liquidity
across global financial markets. Bennett said the following while
sharing the chart below: Expect #stocks and crypto to struggle
while the US dollar is doing this. The $DXY just took out 107 on
its way to 107.40. I still think we see 112-113. Be careful out
there (…). The trend is your friend…unless it’s the $DXY. 112-113
first, but most likely 120 in the next few months. USD up means
risk assets down. The largest crypto by market cap, Bitcoin, saw a
yearly low at around $17,600. As NewsBTC reported, Fidelity’s
Director of Macro Jurrien Timmer believes this level is on par with
the cryptocurrency’s previous bottoms and expects that price point
to operate as critical support. Will Macro Economic Factors Break A
Critical Support For Crypto Using BTC’s Supply and Demand models,
Timmer compared $17,600 with $3,100 and $200, two major support
zones for Bitcoin even in persistent downside trends. The expert
said the following on BTC’s capacity to see more appreciation in
the long term, bullish momentum that will surely push the entire
crypto market upwards: Bitcoin’s price-to-network ratio (my proxy
for a valuation multiple) is back to 2014 levels. Meanwhile, its
network continues to grow, roughly in line with a power regression
curve. In contrast, Bennett expects more losses for BTC’s price and
the crypto market. The first crypto by market cap could bottom
between $9,500 to $13,500. Related Reading: Bitcoin Tumbles As Fed
Opts For Restrictive Rates The expert bearish thesis is based on
the U.S. Federal Reserve (Fed) current monetary policy. The
financial institution is set on stopping inflation from going
higher and will continue to increase interest rates, Bennett
believes, to achieve that goal. Bear market rallies are easy to
identify even without a chart. It comes down to one simple
question. Is the fed easing or tightening? ➡️If easing, dips are
for buying ➡️If tightening, rallies are short-lived The fed just
began tightening and isn’t likely to stop anytime soon. — Justin
Bennett (@JustinBennettFX) August 17, 2022
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