Bitcoin (BTC) hugged a key long-term trendline on Sept. 7 as U.S. dollar strength hit its highest in six months.
Bitcoin vs. 200-week moving average forms “million dollar question”
Conditions were less volatile than the day prior, which saw a trip to $26,000 and local lows under $25,400 within a single hourly candle.
Bitcoin market participants remained cautious overall, with predictions of fresh downside to come becoming more and more commonplace.
#Bitcoin Open Interest ramping up yet again.— Daan Crypto Trades (@DaanCrypto) September 7, 2023
Looks to be setting up for another wick to take out some positions soon. Looks to mainly be shorts chasing price here at the last bit. pic.twitter.com/lr3VYtxu7F
“$BTC - unless we reclaim may low I still think lower,” popular trader TraderSZ told X (formerly Twitter) followers on Sept. 7.
“Taken a short here half size targeting 23.6k. If we reclaim May low I will look to scale out.”
Michaël van de Poppe, founder and CEO of trading firm Eight, flagged the 200-week exponential moving average (EMA) at $25,670 as the key level to watch on weekly timeframes.
“The million dollar question is whether #Bitcoin holds above the 200-Week EMA,” he summarized.
Fellow trader and analyst Toni Ghinea was more categorical, eyeing $25,000 and lower next for Bitcoin, with altcoins also due to suffer.
“I said 25k will happen. I said that ALTS will make new lows. I’m now saying $BTC will nuke to 19-23k,” he wrote in an X post.
“This move down is far from over. Ignore the ETF narrative. It’s only used to manipulate the market. Soon it will be time to buy.”
Ghinea referenced the ongoing battle to launch the United States’ first Bitcoin spot price exchange-traded fund (ETF) — a key low-timeframe volatility source in recent weeks.
Dollar stokes crypto, risk asset concerns
Looking beyond crypto markets, the U.S. dollar presented a compelling case for suppression across risk assets.
The U.S. Dollar Index (DXY), having broken through local highs seen in late May, hit 105.15 on Sept. 7 — its highest since March 10.
“This rally by the dollar will continue to be a drain on risk assets, especially those the furthest up the risk curve (i.e. crypto),” analyst Benjamin Cowen wrote in part of X analysis.
TraderSZ continued the theme, forecasting downside for U.S. equities at the hands of DXY strength.
$ES update. So combining dxy view, where btc and eth are at, and now this. Putting pieces together for now tells me further downside till proven otherwise https://t.co/oHYXhllzcp pic.twitter.com/87H7YhX98c— TraderSZ (@trader1sz) September 7, 2023
“Price action for the U.S. Dollar Index #DXY is extremely bullish (and therefore bearish for financial assets),” Caleb Franzen, senior analyst at Cubic Analytics, added.
“When it broke above the 200-day moving average cloud & the trendline from 2022 highs, I said it was important to listen. Now we’ve flipped them into support.”
An accompanying chart showed the DXY 200-day simple and exponential moving averages.
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