Bitcoin Dips Below $24,000 Again As DXY Hits 7-Week High
February 23 2023 - 7:03AM
NEWSBTC
The Bitcoin price has fallen back below the $24,000 level, while
the US Dollar Index (DXY) has reached a seven-high. After BTC
managed to defend the key support of $23,867 in the 1-day chart
yesterday, the bulls now need to prove their strength again.
Otherwise, a drop to the $23,300 level might be inevitable, where
larger amounts of liquidity might be waiting. As NewsBTC reported
yesterday, the zone between $22,659 and $23,325 is currently the
most important level of support, as 1.41 million addresses bought
711,550 BTC in this area. DXY Vs. Bitcoin: Who Wins? The Bitcoin
market has decoupled from its correlation with the U.S. dollar
index and the S&P 500 in recent weeks and managed to rally
despite a strong DXY. This trend now needs to be defended,
especially as the dollar index has posted a new seven-week high of
104.68. At press time, the DXY was hovering around 104.52, hovering
around the weekly high as a result of the Fed’s hawkish concerns in
the FOMC Minutes released yesterday. The index climbed 0.36% on
Wednesday after the minutes were released. The FOMC Minutes showed
that almost all Fed policymakers favored a slowdown in rate hikes.
At the same time, they pointed out that lowering still-high
inflation to 2% requires further rate hikes. Related Reading: Bears
Beware: Bitcoin “Trend” Strengthens To Pre-ATH Levels With that in
mind, Fed officials signaled that a robust U.S. economy may prompt
them to raise rates a bit more than expected to combat high
inflation. As analyst LeClair noted via Twitter, rate cuts appear
to be off the table for 2023. Rate cuts are off the table for 2023.
pic.twitter.com/G9P51DnaBK — Dylan LeClair 🟠 (@DylanLeClair_)
February 22, 2023 This is likely to give further strength to the US
dollar in the long run and put pressure on the sentiment on the
Bitcoin market. Related Reading: In The Bear Bitcoin Run Of 2022,
Smart Money Were Not “Smart” A trend-setting decision for the DXY
or risk assets could come as early as tomorrow (Friday). That’s
when the U.S. fourth quarter Personal Consumption Expenditure (PCE)
estimate and preliminary U.S. Gross Domestic Product (GDP) numbers
will be released. QCP Capital’s Analysis Singapore-based crypto
options trading giant QCP Capital explained in its latest analysis
that for the dollar to strengthen, the NFP (nonfarm payroll), CPI
and FOMC would need to support the move next month. The market is
already pricing a higher rate for 2023 than the Fed’s dots now,
which means it would take another strong set of data and the FOMC
to move up their median to kick off the next leg lower for risk
assets. Until then, according to QCP Capital, BTC will probably
move in a range and wait for the next signal. On a longer time
frame, QCP warns that Bitcoin could be in for another sell-off,
based on the Elliott Wave Theory: A potential double top is forming
against the August 2022 correction high, and May 2022 reaction is
low at 25,300. Above that we have the huge 28,800-30,000 resistance
which is the Head and Shoulders neckline. Until these levels break,
our 5 wave count still remains valid, with a final Wave 5 lower to
come. Featured image from Kanchanara / Unsplash, Chart from
TradingView.com
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