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Best monthly gains since October 2021 — 5 things to know in Bitcoin this week

July closed with Bitcoin up almost 17%, but now, analysts are turning to how long the bullish trend can last.

Bitcoin (BTC) starts a new week and a new month on a cautiously positive footing after protecting crucial levels.

After an intense July in which macro factors provided significant volatility, BTC price action managed to provide both a weekly and monthly candle favoring the bulls.

The road to some form of recovery continues, and at some points in recent weeks, it seemed like Bitcoin would suffer even harder on the back of June’s 40% losses.

Now, however, there is already a sense of optimism among analysts, but one thing remains clear — this “bear market rally” does not mean the end of the tunnel yet.

As Summer 2022 enters its final month, Cointelegraph takes a look at the potential market triggers at play for Bitcoin as it lingers near its highest levels since mid-June.

Spot price snatches back bear market trendlines

In terms of Bitcoin’s July performance, things could have been a lot worse.

After June saw losses of nearly 40%, BTC/USD managed to close out last month with respectable 16.8% gains, according to data from analytics resource Coinglass.

BTC/USD monthly returns chart (screenshot). Source: Coinglass

While those gains at one point passed 20%, July’s tally nonetheless remains Bitcoin’s best since October 2021 — before the latest all-time highs of $69,000 hit.

With solid foundations in place, the question among analysts is now if and how long the party can continue.

“First monthly close in green since March,” popular trader and analyst Josh Rager responded:

“After monthly closed above 2017 all-time high from last cycle, price is slowly climbing up. Looks good so far and even if this is a ‘bear market,’ I’m happy to buy dips right now.”

Others were more cautious, among them fellow trader and analyst Crypto Tony, who noted that the recent local highs just above $24,000 were still acting as unchallenged resistance on the day.

“I am looking for a breakdown of this Bitcoin pattern and remain short while we are below the $24,000 supply zone we rejected off,” he confirmed to Twitter followers.

Nonetheless, the weekly and monthly close sealed some important levels of support for Bitcoin. Specifically, the 200-week moving average flipped from resistance on the weekly chart, and BTC/USD retained its realized price, data from Cointelegraph Markets Pro and TradingView shows.

In its latest weekly newsletter released last week, Blockchain infrastructure and cryptocurrency mining firm Blockware also noted that a reclaim of the 180-period exponential hull moving average (EHMA) at just under $22,000 on the monthly chart would be “quite bullish.”

“Monthly also appears to be reclaiming its 180-week EHMA, a level we’ve talked about over the last few months as a macro accumulation area for BTC. This closes Sunday night EST as well,” lead insights analyst William Clemente wrote:

“If it does reclaim, would be quite bullish as failed breakdowns/breakouts are a strong signal.”

BTC/USD 1-week candle chart (Bitstamp) with 200-week moving average. Source: TradingView

Macro triggers cool for August

The macro picture to begin August is one of relief mixed with a sense of distrust over how the rest of the year could play out.

In short timeframes, United States equities survived last month’s Federal Reserve-induced volatility to end July on a high. As Cointelegraph previously reported, calls for an extended rally in stocks are increasing, something which could only be good news for highly-correlated crypto markets.

Analyzing the state of commodities, meanwhile, popular Twitter account Game of Trades predicted that oil would soon lose ground and that this would have a conspicuous impact on U.S. inflation.

Currently at more than forty-year highs, the Consumer Price Index (CPI) is responsible for the Fed rate hikes pressuring risk assets across the board. An about turn in inflation and thus Fed policy could thus swiftly turn the tables.

“Big sellers stepped in for oil on Friday,” one post from the weekend read:

“Looks like oil is poised for a breakdown, taking the CPI with it.”

The global picture when it comes to commodities is not that straightforward, however, with macro analyst Alex Krueger conversely warning that Europe’s energy crisis had not yet played out in market pricing.

For Bitcoin, then, the current recovery is more a “bear market rally” than a true return to strength.

“Yes this is a bear market rally … for now,” Krueger wrote:

“Thing is if inflation comes down fast enough, which is feasible, and Europe’s energy crisis is not exacerbated by a harsh winter, also feasible, this could end up being the beginning of the bull market. Nobody knows as of now.”

Krueger added that the status quo should remain until “at least until the end of August” when fresh Fed events impact the market.

In order of importance, he listed the September key rate decision, September CPI, the Fed’s Jackson Hole summit on August 25 and the August 10 CPI print for July.

Turning to U.S. dollar strength, the U.S. dollar index (DXY) remained at lows not seen for nearly a month on the day, currently below 106.

For Game of Trades, the index was more significant than the numbers. After its parabolic uptrend, a clear change of direction was now visible on the DXY daily chart.

“DXY has broken its parabola. There is only one way a broken parabola ends,” it commented.

U.S. dollar index (DXY) 1-day candle chart. Source: TradingView

RSI raises questions over price bottom

Turning to on-chain signals, a rebound in one of Bitcoin’s core fundamentals has not been enough to convince analyst Venturefounder that the BTC price bottom is in.

Zooming out to a multi-year view and comparing BTC/USD across market cycles, the popular content creator argued that Bitcoin’s relative strength index (RSI) is still suppressed after its peak in April 2021.

RSI measures how overbought or oversold BTC/USD is at a certain price, and since May has seen its lowest readings on record.

Despite suggesting that Bitcoin is trading wildly lower than its fair value, RSI has yet to regain the “bullish momentum” that characterized the run past $20,000 and beyond at the end of 2020.

In April 2021, Bitcoin hit $58,000 before halving in price by the end of July.

“The only way to see the July 2022 low as the cycle bottom is if you were to see the April 2021 high as the cycle top for this cycle,” Venturefounder stated:

“Bitcoin and Altcoins RSI and bullish momentum peaked in April 2021 and never recovered for the rest of this cycle. Do you think we bottomed?”

Another conspicuous oversold period in RSI came immediately after the March 2020 COVID-19 crash. That event significantly impacted price strength going into the latest block subsidy halving.

BTC/USD, of course, never looked back, going on to reclaim its all-time high of the time around six months later.

BTC/USD 1-mon candle chart (Bitstamp) with RSI. Source: TradingView

Purpose ETF finally adds to holdings

Things could be looking up for institutional Bitcoin involvement as subtle signs of recovery play out in statistics.

The latest such signal comes from the world’s first Bitcoin spot price exchange-traded fund (ETF), the Purpose Bitcoin ETF.

After its holdings suddenly declined by 50% in June, the product is finally adding BTC again, suggesting that demand is no longer falling.

Purpose added 2,600 BTC, something commentator Jan Wuestenfeld additionally noted ended several weeks of dormancy.

“Assets under management still far away from the all-time high, however,” he added.

Purpose Bitcoin ETF holdings chart. Source: Glassnode

The recovery trend is far from omnipresent, however. A look at the Grayscale Bitcoin Trust (GBTC) continues the troublesome trend of lack of demand.

The fund’s premium to spot price, long in fact a discount, is now circling record lows of nearly 35%, data from Coinglass confirms.

Grayscale continues legal action against U.S. regulators over their refusal to allow a spot Bitcoin ETF to launch on the domestic market. GBTC would convert to such an ETF when conditions allowed.

GBTC premium vs. asset holdings vs. BTC/USD chart. Source: Coinglass

New month, new fear

It was a nice ride, but crypto market sentiment is already back in the “fear” zone.

Related: Top 5 cryptocurrencies to watch this week: BTC, BNB, UNI, FIL, THETA

The latest readings from the Crypto Fear & Greed Index confirm that “neutral” sentiment could barely last a day, and that despite high prices prevailing, cold feet are hard to shake.

The Index measures 33/100 as of Aug. 1, still high compared to recent months but already considerably below the highs of 42/100 seen just days ago.

Crypto Fear & Greed Index (screenshot). Source: Alternative.me

For research firm Santiment, however, there remains a cause for optimism. The firm’s proprietary metric governing transaction volume relative to overall network value for Bitcoin ended July in “neutral” territory of its own.

The network value to transaction (NVT) token circulation model, after printing bullish divergences in May and June, thus came through at the latest monthly close.

“With a neutral signal now as prices have risen and token circulation has declined slightly, August can move either direction,” Santiment summarized in a Twitter update about the latest numbers.

Bitcoin NVT model. Source: Santiment/ Twitter

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Bitcoin traders eye levels to hold as ‘decision time’ looms for BTC price

Levels immediately below the current $23,000 need to hold at the weekly close for Bitcoin bulls to breathe easy, commentators warn.

Bitcoin (BTC) recovered above $23,000 on July 22 as attention increasingly focused on the upcoming weekly close.

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

BTC price needs to preserve at least $22,400

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD finding renewed strength after briefly dipping toward $22,000.

The pair traded in a critical zone for bulls on the day, with the 50-day and 200-week moving averages (MAs) still yet to flip from resistance to support.

Analysts were holding out for the weekly candle close to determine the strength of Bitcoin’s latest uptrend, which, at one point, delivered weekly gains of up to 25%.

“To perform a reclaim of the 200-week MA as support, BTC needs to Weekly Close above $22800,” popular trader and analyst Rekt Capital wrote in part of a recent Twitter update.

For fellow trader Jibon, meanwhile, $22,400 was more important as a minimum level to close out the week.

“Next Week Decision Time, $BTC will go 30-40K or 12-15K. I Want Weekly Close above $22,401,” he told Twitter followers on the day.

While sticking by his forecast of the relief rally going as high as $40,000 before another macro low sets in, Jibon acknowledged that Bitcoin was “still in a bear market,” which would last into 2023.

“So All bullish trends are temporary moves,” he explained while debating the forecast.

In its latest market update released on the day, trading firm QCP Capital voiced reservations about the near-term potential for either Bitcoin or altcoins to rise much higher.

“In terms of spot direction, we are not sure if the upside momentum continues in a big way,” researchers wrote.

“The speed of this move higher felt positioning-driven (market was caught short) and the market is starting to show some signs of exhaustion.”

QCP pointed to the upcoming meeting of the United States Federal Reserve’s Federal Open Markets Committee (FOMC) on July 27 as a major volatility event to come.

Markets, it added, were now pricing in a 75-basis-point hike in key interest rates this month, rather than the higher 100-basis-point option feared on the back of the inflation numbers.

“Since the high CPI print, the market has been decisively pricing out the probability of a 100bps hike in the July FOMC,” the update read.

“Currently, a 20% chance of 100bps is still being priced in but our view is that 75bps is the most the Fed will do. So expect another boost as 100 bps gets completely priced out.”

Bets increase on dollar breakdown

As the U.S. dollar index (DXY) consolidated below 20-year highs, meanwhile, analysts were waiting for a long-term parabolic uptrend to show signs of cracking.

Related: Bulls or bears? Both have a fair chance in Friday’s Bitcoin options expiry

U.S. dollar index (DXY) vs. BTC/USD 1-day candle chart. Source: TradingView

USD, as Cointelegraph continues to report, remains distinctly inversely correlated with crypto asset performance.

“It will be a good day when this finally breaks,” popular commentator Rickus said, summarizing the impact of a weaker dollar on risk assets.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Bitcoin holds 5-week high as trader suggests ‘parabolic’ bear trend is over

A crypto renaissance sees Bitcoin price challenge major resistance and long-term trendlines in a much-needed show of strength.

Bitcoin (BTC) took aim at $24,000 on July 20 after a night of solid gains put bulls in the driving seat.

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

Parabolas violated

Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it breached $23,800, its highest level since June 13.

Against expectations, crypto staged a recovery beyond an intra-hour “fake-out” as risk assets benefitted from declining United States dollar strength.

The inverse correlation between the U.S. dollar index (DXY) and Bitcoin remained center stage on the day, with the greenback coming off twenty-year highs at the end of the week prior.

U.S. dollar index (DXY) vs. BTC/USD 1-day candle chart. Source: TradingView

“The Dollar is taking a nice hit today from the bears,” popular trader Crypto Tony told Twitter followers as the breakout took shape:

“Good sign for Bitcoin as things cool off for the DXY.”

Fellow analyst Wolf, meanwhile, eyed the breakdown of a “parabolic trend” in place on DXY throughout 2022. At the same time, as per analysis from popular trader Jibon, BTC/USD had ended its parabolic run to macro lows.

Those “expectations” referred to a strategy forecasting BTC/USD rising to $40,000 before another bearish phase puts in a fresh macro bottom.

Major trendlines see a sudden test

Returning to current price action, meanwhile, significance came in the form of crucial trendlines being broken.

Related: 100X Bitcoin energy use would mean ‘absurd’ $20M BTC price — developer

Among them were the 200-week moving average (WMA) at $22,800 and Bitcoin’s realized price at $21,934 as of July 19, data from on-chain analytics firm Glassnode confirmed.

Bitcoin realized price chart. Source: Glassnode

Both are classic fixtures in Bitcoin bear markets, with BTC/USD usually wicking below while preserving the levels as basic support.

Attention thus focused on the weekly close, which would confirm a breakout from the 200 WMA.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Bitcoin lurks by $22K as US dollar falls from peak, Ethereum gains 20%

It’s all about Ethereum for crypto traders on the day as Bitcoin faces crucial resistance and a slew of sellers lying in wait.

Bitcoin (BTC) hugged $22,000 on July 19 as macro conditions slowly turned to favor risk assets. 

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

Stocks, crypto rise as dollar weakens

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD cooling volatility immediately below the crucial 200-week moving average (WMA).

The Wall Street open saw further gains for United States equities in the face of a declining U.S. dollar, which extended its retracement after hitting its latest two-decade peak.

The U.S. dollar index (DXY) stood at around 106.5 at the time of writing, down 2.6% from the high seen July 14.

For Bitcoin analysts, it was thus a case of wait and see as markets bided their time between buy and sell levels.

“Shared this chart before, but just like that the $DXY is tanking, resulting into risk-on assets showing some momentum,” Cointelegraph contributor Michaël van de Poppe tweeted in an update on the day alongside a DXY chart.

“Yields need to drop now too, but the weakness on the Dollar could put more strength on crypto and Bitcoin.”

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

On-chain monitoring resource Material Indicators, meanwhile, flagged the difference in strength between “psychological” levels such as $21,000 and $22,000 and the 200 WMA closer to $23,000.

“IMO, resistance at $21k and $22k are psychological, whereas the 200 WMA serves as legit technical resistance. FireCharts shows more BTC bid liquidity coming in to support an R/S flip at $21k,” it told Twitter followers on the day publishing data from the Binance order book.

“Looking for more bid liquidity to challenge the ever important 200 WMA.”

BTC/USD order book data (Binance). Source: Material Indicators/ Twitter

The day belongs to Ethereum

Deja vu for altcoin traders, meanwhile, came in the form of outperformance from Ether (ETH) versus other major cryptocurrencies’ intraday gains.

Related: 100X Bitcoin energy use would mean ‘absurd’ $20M BTC price — developer

ETH/USD, already up 25% in a week, added to its momentum overnight, climbing another 20% in just over 24 hours to briefly pass $1,600.

Resistance in the form of the 2018 high at $1,530 posed little problem for bulls, with the level forming a support focus at the time of writing.

“Ethereum relative to Bitcoin has closed above a key resistance,” popular trading account Game of Traders forecast.

“Buckle up for some big moves.”

ETH/USD 1-day candle chart (Binance). Source: TradingView

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Bitcoin fights key trendline near $20K as US dollar index hits new 20-year high

Nothing can keep the U.S. dollar index (DXY) down this year, and concerns over its impact on assets beyond crypto are spreading.

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

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 that had characterized much of the year.

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

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.

Related: How Bitcoin’s strong correlation to stocks could trigger a drop to $8,000

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.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

‘Very small chance’ BTC price could hit $24K, says trader as US dollar cools

A pause in dollar strength allows Bitcoin price action to stem losses, but the outlook is anything but positive, analysts warn.

Bitcoin (BTC) fought to reclaim $20,000 on the July 12 Wall Street open as the U.S. dollar cooled its surge to new two-decade highs.

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

Dollar bull run takes fresh breather

Data from Cointelegraph Markets Pro and TradingView revealed a tug-of-war between buyers and sellers following seven-day lows for BTC/USD.

The intraday losses had come at the hands of a rampant U.S. Dollar Index (DXY), which hit its highest levels since October 2002 at risk assets’ expense thanks to inverse correlation.

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

A subsequent pause gave U.S. equities room to breathe, with both the S&P 500 and Nasdaq stemming losses on the day. 

With the July 13 Consumer Price Index (CPI) print in focus, however, optimism around crypto on shorter timeframes was barely perceptible.

For popular trader and analyst Crypto Ed, there was “more pain to come” for both BTC and stocks.

“There is a very small chance that we see a double correction towards $24,000 or $25,000,” he forecast in a fresh video update, analyzing potential Elliott Wave moves after Bitcoin’s spike to $22,400 last week.

The chances of significant relief were “small,” however, with the option of “nuking down” also on the table. 

Bitcoin hodlers face “remarkable pressure”

For on-chain analytics firm Glassnode, meanwhile, there were already signs from the market that Bitcoin could be in the latter part of its bear cycle.

Related: US inflation data will be ‘messy’ — 5 things to know in Bitcoin this week

In the latest edition of its weekly newsletter, “The Week On-Chain,” analysts argued that long-term holders — those least likely to capitulate — were under “remarkable pressure” to sell.

There was, however, still room left to drop if Bitcoin was to repeat previous bear market behavior.

“The present market structure has many hallmarks of the later stage of a bear market, where the highest conviction cohorts, the long-term holders and the miners, are under remarkable pressure to surrender,” it concluded.

“The volume of supply at a loss has now reached 44.7%, of which a majority is carried by the Long-Term Holder cohort. However, this remains at a less severe level compared to previous bear cycles.”

Charts supporting the thesis included Long-Term Holder Spent Output Profit Ratio (LTH-SOPR), a metric which tracks average profit or loss of LTH coins being spent. LTH addresses are those holding coins for at least 155 days.

“LTH-SOPR is currently trading at 0.67, indicating the average LTH spending their coins is locking in a 33% loss,” Glassnode noted.

Long-Term Holder Spent Output Profit Ratio (LTH-SOPR) annotated chart. Source: Glassnode

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Bitcoin price indicator that marked 2015 and 2018 bottoms is flashing

This week, Bitcoin’s 150-day EMA is set to close below its 471-day EMA for only the third time in history.

Bitcoin (BTC) could undergo a massive price recovery in the coming months, based on an indicator that marked the 2015 and 2018 bear market bottoms.

What’s the Bitcoin Pi Cycle bottom indicator? 

Dubbed “Pi Cycle bottom,” the indicator comprises a 471-day simple moving average (SMA) and a 150-period exponential moving average (EMA). Furthermore, the 471-day SMA is multiplied by 0.745; the outcome is pitted against the 150-day EMA to predict the underlying market’s bottom.

Notably, each time the 150-period EMA has fallen below the 471-period SMA, it has marked the end of a Bitcoin bear market.

For instance, in 2015, the crossover coincided with Bitcoin bottoming out near $160 in January 2015, followed by an almost 12,000% bull run toward $20,000 in December 2017.

BTC/USD weekly price chart featuring ‘pi cycle bottom’ indicator. Source: TradingView

Similarly, the second 150-471 MA crossover in history marked the end of the 2018 bear cycle. It also followed a 2,000% price rally — from nearly $3,200 in December 2018 to $69,000 in November 2021.

Only the third time in history

This week, Bitcoin’s 150-day EMA (at $32,332 as of July 12) is set to close below its 471-day EMA (at $32,208), thus logging the third Pi Cycle bottom in its history.

BTC/USD weekly price chart featuring the next potential  cycle bottom. Source: TradingView

The crossover appears as Bitcoin wobbles around $20,000, after a 75%-plus price correction from its peak level of $69,000.

Related: Bitcoin price may bottom at $15.5K if it retests this lifetime historical support level

The BTC/USD pair has been flirting with the level for almost a month, with the latest MLIV Pulse survey noting that its price has more possibility to fall toward $10,000 than rebound toward $30,000.

The fears emerge due to an ongoing crypto market carnage led by the failure of several high-profile companies.

MLIV Pulse Survey results on Bitcoin’s next trend. Source: Bloomberg

Meanwhile, hawkish central bank policies that focus on removing excess cash from the economy have also spooked investors. 

Nevertheless, Bitcoin could rebound to at least $30,000 if the given bottom fractal plays out. The interim upside target coincides with the 0.236 Fib line of the Fibonacci retracement graph drawn from the $69,000-swing high to the $17,000-swing low, as shown in the chart above.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Bitcoin risks new lows as $20K looms amid dollar euro parity

Support is thin on the ground, analysts and traders warn, as ex-BitMEX CEO Arthur Hayes heralds the start of the fiat currency “doom loop” with USD/EUR parity.

Bitcoin (BTC) headed for $20,000 after the July 11 Wall Street open amid fresh warnings to “prepare for new lows.”

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

$20,300 eyed as next support zone to hold

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD failing to recover losses that had immediately followed the weekly close at $20,850.

The pair had nonetheless locked in its best week’s gains since March, these nonetheless apt to unravel as market uncertainty lingered.

For on-chain analytics resource Material Indicators, the level to watch was a trendline acting as support since June.

“BTC fell back below the 21-ay Moving Average after the Sunday close,” it wrote in a summation-like Twitter post alongside a heatmap of buy and sell interest on major exchange Binance.

“FireCharts shows some bid liquidity in close range, but it may not be enough. If price falls below the trend line, prepare for new lows.”

BTC/USD order book data (Binance) with trend line. Source: Material Indicators/ Twitter

Others predictably focused on the July 13 United States Consumer Price Index (CPI) data release, this tipped to spark downside across risk assets should June’s inflation significantly outpace estimates.

Blockware analyst Joe Burnett additionally highlighted the potential for miners, already facing tight margins, to capitulate more heavily should BTC price action beat its prior lows.

“Crucial support now around $20.3K. Has to hold and, if the markets does, new highs pos,” Cointelegraph contributor Michaël van de Poppe nonetheless countered.

Hayes sees start of fiat “doom loop”

Macro takes were hardly any more optimistic. For Arthur Hayes, former CEO of derivatives trading platform BitMEX, confirmation was in that at least the U.S. dollar and the euro were beginning a “doom loop” to oblivion thanks to hitting parity.

Related: US inflation data will be ‘messy’ — 5 things to know in Bitcoin this week

Central banks would now have no option but to adopt yield curve control (YCC), sparking the disintegration of the currency which could ultimately leave Bitcoin on top as the new global standard — a prediction previously laid out in a blog post in April.

“$1 = 1€. Foreign currencies crashing against the dollar. And US dollar losing purchasing power fast (CPI est. 8.8%),” PlanB, creator of the Stock-to-Flow Bitcoin price models, added.

“When money dies .. again.”

The U.S. dollar index (DXY) continued its unrelenting surge higher on the day as the European gas crisis pressured the euro, hitting nearly 108.2 — a new twenty-year high.

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

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Salary payments in USDT stablecoin ruled as illegal in the Chinese court

Tether USDT stablecoin cannot be used for salary payments, a Chinese court ruled, citing the country’s blanket ban on all types of crypto transactions.

Despite the Chinese government banning all kinds of cryptocurrency transactions last year, some firms apparently still use stablecoins like Tether (USDT) to pay their employees.

Beijing’s Chaoyang District People’s Court has ruled that stablecoins like USDT cannot be used for salary payments, the local news agency Beijing Daily reported on Wednesday.

The Chinese court stated that virtual currencies like USDT cannot circulate in the market as a currency, which requires all employers to only pay their workers using the official currency, renminbi (RMB).

The ruling came as part of a court case involving a staff member at a local blockchain firm suing his employer for not agreeing to pay his wages in RMB. The plaintiff argued that instead of paying him in RMB, the firm had paid his salary and bonuses in the USDT stablecoin.

Citing China’s blanket ban on crypto enforced in September 2021, the court pointed out that digital currencies like USDT do not have the same legal status as legal tender. The court noted that the plaintiff’s request to be paid wages and bonuses in the form of RMB fully complies with local laws and the court supports it.

As such, the court ordered the defendants to pay a total of more than 270,000 RMB ($40,000) in wages, performance bonuses and annual bonuses owed to the plaintiff.

As previously reported by Cointelegraph, the People’s Bank of China officially announced a set of measures to fight against crypto adoption in China in September 2021. The action involved 10 Chinese state authorities establishing a new mechanism to prevent financial players from participating in any cryptocurrency transactions.

Despite the ban, some local blockchain executives are positive about stablecoins like USDT. Yifan He, CEO of Red Date Technology — a tech firm involved in the Blockchain Service Network (BSN), China’s major blockchain project — told Cointelegraph last month that stablecoins would do just fine only if properly regulated.

“USDC or USDT are payment-related currencies, not speculative assets. Once they are fully regulated, they are fine,” he said.

Addressing the latest news from China, He noted that all USDT transactions are illegal in China. However, banning such transactions may be too difficult for regulators, the exec suggested. “There is no way to ban USDT payments technically in any country,” He said. The expert also believes that USDT and its major rival USD Coin (USDC) are “not popular at all in China.” 

Related: Circle’s USDC on track to topple Tether USDT as the top stablecoin in 2022

Tether USDT is a major stablecoin pegged by the U.S. dollar on a 1:1 ratio, backed by U.S. dollars held in U.S. treasury reserves, cash deposits and other assets.

USDT is the third-largest cryptocurrency after Bitcoin (BTC) and Ether (ETH) in terms of market capitalization and is the biggest digital asset in terms of daily trading volumes. At the time of writing, USDT’s daily trading volumes stand at $57 billion, or 247% more than the entire daily trading volumes of Bitcoin.

Bitcoin faces fresh pressure as US dollar crushes gold, risk assets

BTC/USD falls $1,000 while spot gold gives up 2% as USD strength intensifies, beating the year’s previous peaks.

Bitcoin (BTC) hit daily lows on the July 5 Wall Street open as the U.S. dollar saw a violent surge higher. 

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

USD sets yet another 20-year record

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD retreating to $19,281 on Bitstamp as the Independence Day long weekend concluded with a bump.

The pair had seen last-minute gains the day prior, these fizzling as the return of Wall Street trading was accompanied by USD strength laying waste to gains across risk assets and safe havens.

Bitcoin traded down $1,000 on the day, while spot gold shed over 2% and U.S. equities markets also fell. The S&P 500 was down 2.2% at the time of writing, while the Nasdaq Composite Index lost 1.7%.

XAU/USD 1-hour candle chart. Source: TradingView

The U.S. dollar index (DXY), on the contrary, hit 106.59, a level not seen since December 2002 and above previous breakouts from Q2 this year.

Bitcoin analysts thus waited for signs of a trend reversal to provide some relief to crypto markets.

“Euro hitting record levels, $1.033 at this point. Last seen in the years 2002–2003 and DXY, of course, shooting up like a rocket,” Cointelegraph contributor Michaël van de Poppe commented, noting that the euro was heading towards USD parity.

In additional commentary, Caleb Franzen, senior market analyst at Cubic Analytics, pointed to how the DXY shed light on investor sentiment over the health of the economy.

“Over the past week, yields are falling but the dollar keeps rising. This dynamic proves that investors are rushing to safety, with heightened fears of recession,” part of a tweet read.

The U.S. dollar index (DXY) 1-month candle chart. Source: TradingView

Crypto Fear & Greed Index hits 2-month high

While volatility edged back into crypto markets, sentiment was yet to reflect the impact of a rampant dollar.

Related: ‘Wild ride’ lower for BTC? 5 things to know in Bitcoin this week

The Crypto Fear & Greed Index stood at 19/100 on the day, still indicative of “extreme fear” but nonetheless its highest reading since before the Terra LUNA debacle in May.

Crypto Fear & Greed Index (screenshot). Source: Alternative.me

As Cointelegraph additionally reported, investment manager ARK Invest revealed that it was still “neutral to positive” on BTC under current circumstances.

Analyzing Bitcoin futures market sentiment, meanwhile, Edris, a contributor to on-chain analytics platform CryptoQuant, voiced caution about making conclusions over any form of recovery.

The taker buy/ sell ratio, which indicates whether buyers or sellers are in control, saw some relief on the day, Edris showed, but the move should be taken with a pinch of salt.

“However, note that it could just be a consolidation or a bullish pullback before another continuation lower,” a blog post read.

“So, many other factors should be considered closely in the coming weeks in order to determine if a bullish reversal or another bull trap could be expected.”

Bitcoin taker buy/ sell ratio annotated chart. Source: Edris/ Twitter

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.