Bitcoin (BTC) extended losses on the July 21 Wall Street open after a key resistance level failed to hold as new support.
Dollar rises to squeeze risky assets
Data from Cryptooshala Markets Pro and trade view showed that BTC/USD fell to $22,340 on Bitstamp after the first call, 8% below the local high.
The pair’s progress ran into a challenge from Tesla, which revealed it had sold 75% of its BTC position at a loss. Then macroeconomic events added to Bitcoin’s problems in the form of a new strengthening of the US dollar and an unexpected increase in interest rates by the European Central Bank (ECB) to fight inflation.
At the time of writing, the US Dollar Index (DXY) has rebounded to 107 points, up 0.6% on the hour, as US equities, by contrast, suffered modest losses.
At the same time in Europe, the ECB’s decision did not improve the position of the euro, which returned early gains as the eurozone struggled with new political consequences in Italy.
good morning on historical #ECB day from Italy, where the key interest rate should be at 6% and thus 6 bps higher than the current rate, in accordance with the Taylor rule with the core of Italy #inflation 3.4% above the ECB target and unemployment at 8.1% close to NAIRU. ECB rates should be 7.4 p.p. above for all EZ. pic.twitter.com/1Nh8yg4e6A
— Holger Zschepitz (@Schuldensuehner) July 21, 2022
“Curious to see if we get the same stock breakdown as before,” popular trader Josh Rager. tweetedwatching the S&P 500 fractal since the end of May.
“Naturally, this will affect the price behavior of BTC and cryptocurrency.”
The macro impact has already cost Bitcoin its 200-week and 50-day moving averages at the time of writing, both of which have stalled at $22,800.
“Unfortunately for the bulls, BTC has lost its 50-day moving average and key 200-week moving average,” network analyst Material Indicators wrote in part of its latest update, adding that the immediate macro support level is now just below $20,000.
A retest of the 50-day moving average confirmed the trend prediction signals on chart D. Unfortunately for the bulls, #BTC lost the 50-day moving average and the key 200-week moving average. The next level of technical support is the green 21-day moving average just above the micro trend line. pic.twitter.com/r5m5HFl15i
— Material indicators (@MI_Algos) July 21, 2022
For Popular Crypto Trader and Analyst Tony, $21,700 Was Now Level save.
Meanwhile, comparing 2022 to previous bear markets, he argued that Bitcoin should still be in line for some upside ahead of another drop, a view echoed elsewhere this week.
I just reviewed the previous bear markets looking at the timing and the overall look. So far, our transition has taken 210 days, making the biggest drop with the least relief.
I think more relief than another fall at the end of this year pic.twitter.com/pqjDEgOy1b
— Crypto Tony (@CryptoTony__) July 21, 2022
Altcoins repeat the loss of momentum
For altcoins, volatility has been common as large-cap tokens have faced headwind uncertainty.
7/20 Price Analysis: BTC, ETH, BNB, XRP, ADA, SOL, DOGE, DOT, MATIC, AVAX
Ether (ETH), previously the top ten cryptocurrencies by market cap, fell 9.7% overnight.
At the time of writing, ETH/USD was approaching the $1,500 mark, while Cardano (ADA) and Solana (SOL) also lost about 10% in 24 hours.
However, commenting on the outlook, Jonah Van Burgh, head of trading at crypto liquidity provider Cumberland, pointed to Ethereum’s move to Proof-of-Stake as one of the factors keeping the biggest altcoin bullish.
“While price action in the recent past has been technical and highly macro-correlated, this move was crypto-fundamental: Sepolia’s testnet successfully merged with proof-of-stake on July 6, setting the stage for the mainnet in early fall. merger,” one in a series of tweets published on the day read.
The views and opinions expressed here are solely those of the author and do not necessarily reflect those of Cryptooshala.com. Every investment and trading step involves risk, you should do your own research when making a decision.
Credit : cointelegraph.com