Bitcoin (BTC) found a new focus just under $20,000 on July 14 as U.S. dollar strength hammered out yet another two-decade high.

Bitcoin

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

DXY moves bring yen, euro into focus

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD rebounding from lows sparked by a fresh 40-year high for U.S. inflation as per the Consumer Price Index (CPI).

After briefly dipping under $19,000, the pair took a flight above $20,000 before consolidating immediately below that psychologically significant level.

For on-chain analytics resource Material Indicators, it was now "do or die" for BTC price action when it came to a key rising trendline in place since mid-June.

On the day, that trendline stood at around $19,600, with BTC/USD now preserving it as support.

Significant gains meanwhile looked less likely for crypto markets thanks to the day once more being ruled by the U.S. dollar. 

After tanking following the CPI print, the U.S. dollar index (DXY) returned with a vengeance to post its highest levels since 2002 — a phenomenon which had characterized much of the year.

The new peak measured 108.64, an increase of over 1% versus the 24-hour lows.

Chart

U.S. dollar Index (DXY) 1-hour candle chart. Source: TradingView

Beyond the short-term negative impact for Bitcoin and risk assets, USD strength was also bad news for other major world currencies, with the Japanese yen particularly in focus for BTC commentators

"Yen getting battered again today. Bank of Japan frozen in place, waiting for Fed reversal. Until then, they will continue to destroy their currency because they have no other option," popular Twitter account Stack Hodler argued on the day.

BoJ + Yen is a glimpse into the future for ECB + Euro. Are you seeing why Bitcoin matters yet?

As Cointelegraph reported, some believe that the Fed will likewise have no choice but to halt inflation-busting interest rate hikes toward the end of 2022.

"In response to today’s CPI print which showed broad-based and accelerating inflation, short-term FF futures moved upward implying peak FF of 3.68% by 12/22 with the @federalreserve immediately thereafter cutting rates to reach 2.9% by 1/24," investor and hedge fund manager Bill Ackman wrote in part of a Twitter thread in reaction to the CPI data.

Implicitly the market expects a more aggressive Fed will push us into recession by year end and then cut rates in response.

Little belief in an altcoin rebirth

Turning to altcoins, flat progress over the past 24 hours was no reason to assume prices could not drop more, one analyst warned.

In fresh updates on the day, Il Capo of Crypto predicted bearish moves for at least two tokens in the top ten cryptocurrencies by market cap.

Ether (ETH), for example, was threatening a return to a three-figure price tag.

Cardano (ADA) faced an even worse situation after fall through support, which had been tested six times in as many weeks.

"Support broken and now tested as resistance. Very bearish," he commented.

Data from research firm Santiment nonetheless shed light on the potential for a possible rebound of an altcoin, which had "dropped harder than most" this year.


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Recommended content


Recommended Content

Editors’ Picks

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC declines as resistance emerges near all-time high

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC declines as resistance emerges near all-time high

Bitcoin and Ethereum are approaching their key support levels, and a sustained close below these marks could lead to further declines. 

More Cryptocurrencies News
TON set to launch synthetic Bitcoin to boost its DeFi solutions

TON set to launch synthetic Bitcoin to boost its DeFi solutions

TON revealed its plan on Thursday to launch a synthetic Bitcoin token on its blockchain, allowing users to trade, stake, and earn yield using BTC. Following the announcement, TON is down over 3%.

More Ton News
Maker Price Forecast: MKR could stage 40% rally

Maker Price Forecast: MKR could stage 40% rally

MakerDAO is up 2% on Thursday and could be set for a 40% rise in the coming weeks if it successfully maintains an extended move above the descending trendline of a falling wedge. On-chain data also supports the bullish outlook after a four-month-long decline.

More MakerDAO News
USDT market cap crosses $120 billion as stablecoins continue their uptrend

USDT market cap crosses $120 billion as stablecoins continue their uptrend

The stablecoin market cap continued its uptrend in October, characterized by USDT reaching a $120 billion market cap, according to a CCData report on Thursday. This indicates that investors are preparing liquidity to fuel more demand.

More USDT News
Bitcoin: New all-time high at $78,900 looks feasible

Bitcoin: New all-time high at $78,900 looks feasible

Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP