Bitcoin (BTC) experienced a tense day on September 7 as the U.S. dollar strengthened to its highest level in six months, causing BTC to closely follow a key long-term trendline. The price of BTC hovered around the $25,700 mark, with trading conditions being less volatile compared to the previous day.
Many Bitcoin market participants remained cautious and expressed their expectations of further downside to come. Popular trader TraderSZ suggested that unless BTC is able to reclaim May’s low, he believes that lower prices are still in store. He took a short position and targeted $23.6k, but mentioned that if the May low is reclaimed, he will look to scale out.
Another trader and analyst, Toni Ghinea, was even more certain about Bitcoin’s future price movement. He predicted that BTC will drop to $19-23k and that altcoins will also experience new lows. Ghinea dismissed the significance of the ongoing battle to launch the United States’ first Bitcoin spot price exchange-traded fund (ETF), stating that it is merely a tool used to manipulate the market.
Beyond the crypto markets, the strengthening U.S. dollar posed concerns for risk assets. The U.S. Dollar Index (DXY) hit its highest level since March 10, reaching 105.15 on September 7. Analyst Benjamin Cowen emphasized that the dollar’s rally will continue to be a burden on risk assets, especially cryptocurrencies. He suggested that the recent strength of the U.S. dollar would negatively affect crypto prices.
TraderSZ also believed that the strength of the DXY would lead to a decline in U.S. equities. He pointed to the bullish price action of the U.S. Dollar Index, which could in turn be bearish for financial assets. Caleb Franzen, a senior analyst at Cubic Analytics, highlighted the significance of the DXY breaking above the 200-day moving average cloud and the trendline from 2022 highs. He confirmed that this development was important and could have implications for market movements.
Overall, uncertainty loomed in the Bitcoin market as the U.S. dollar continued to strengthen. Traders and analysts remained cautious about the future direction of BTC and expressed concerns about the impact of the dollar’s strength on risk assets. As the market awaited further developments, investors were advised to conduct their own research and exercise caution when making trading decisions.