As the U.S. dollar challenges March 2020 highs, all bets are off when it comes to fresh Bitcoin price strength.
Bitcoin (BTC) reclaimed $39,000 on April 27 after another night of pain saw BTC/USD hit its lowest levels since mid-March.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
“All assets suffer” at hands of rampant dollar
Tuesday had seen fresh trouble as soon as Wall Street trading began, Bitcoin following stocks downhill once again to hit $37,700 twice.
Despite that area already being on the radar as a liquidity grab opportunity, some were far from convinced that the sell-off was done.
The current relief, popular trader Kaleo argued, was simply a form of a dead-cat bounce and the real pain would begin when momentum faltered.
Dump after this bounce is over with is gonna be so brutal
“Well, this price action on Bitcoin isn’t shouting too much for upside, at this point. Tricky as it’s giving back every upwards push again,” Cointelegraph contributor Michael van de Poppe added.
As throughout the week, the U.S. dollar showed no signs of aborting its bull run, adding pressure to crypto as U.S. dollar currency index (DXY) challenged multi-decade highs set in March 2020.
“The DXY is reaching higher than my base case, due to policymaker decisions outside of my base case,” Economist Lyn Alden wrote in a Twitter thread about the phenomenon.
U.S. dollar currency index (DXY) 1-week candle chart. Source: TradingView
TradFi and crypto feel the fear
Nerves among crypto and traditional traders alike were thus plain to see, reflected in plummeting market sentiment.
The Crypto Fear & Greed Index reached its lowest level since April 12, which at 21/100 represented “extreme fear” as the guiding market mood.
Crypto Fear & Greed Index (screenshot). Source: Alternative.me
Its traditional market counterpart, the Fear & Greed Index, until recently lagging crypto in “neutral” territory, also fell into line, recording 27/100 or “fear” on Wednesday.
Fear & Greed Index (screenshot). Source: CNN
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