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Bitcoin price eyes $24K July close as sentiment exits ‘fear’ zone

The relatively good times could continue next month, one prediction says after July manages to reverse the worst of the 2022 crypto downturn.

Bitcoin (BTC) dropped volatility on the last weekend of July as the monthly close drew near.

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

200-week moving average in focus for July close

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD retaining $24,000 as resistance into July 30.

The pair had benefitted from macro tailwinds across risk assets in the second half of the week, including a flush finish for United States equities. The S&P 500 and Nasdaq Composite Index gained 4.1% and 4.6% over the week, respectively.

With off-speak trading apt to spark volatile conditions into weekly and monthly closes thanks to thinner liquidity, however, analysts warned that anything could happen between now and July 31.

“Just gonna sit back and watch the market up until the weekly close like always,” Josh Rager summarized:

“Hard to get into any trades seriously though they may be a few outliers in current market condition that continue to perform well over the weekend.”

Others focused on the significance of current spot price levels, which lay above the key 200-week moving average (MA) at $22,800. Finishing the week above that trendline would be a first for Bitcoin since June.

Adopting a conservative short-term view, however, popular trader Roman called for a return to at least $23,000 thanks to “overbought” conditions.

Optimism continued to increase across crypto markets through the week, the Crypto Fear & Greed Index hitting its highest levels since April 6 after exiting its longest-ever period of “extreme fear.”

At 45/100, the Index was officially in “neutral” territory on the day.

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

Bullish continuation slated for August

Looking to next month, meanwhile, Cointelegraph contributor Michaël van de Poppe said that stock performance would continue to provide fertile conditions for a crypto rebound.

Related: Bitcoin bear market over, metric hints as BTC exchange balances hit 4-year low

“Sounds like we’re going to get that continuation in August, including with crypto and Bitcoin,” part of a Twitter update on July 29 stated:

“Summer relief rally it is!”

August was set to be a quiet month for U.S. macro triggers, with the Federal Reserve not due to alter policy in a scheduled manner until September.

The risk of advancing inflation nonetheless remained, with the next Consumer Price Index (CPI) print due August 10. This week, the European Union reported its highest-ever monthly inflation estimate for the eurozone at 8.9%.

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.

3 Bitcoin trading behaviors hint that BTC’s rebound to $24K is a ‘fakeout’

BTC price surged above a key resistance cluster, but its market structure and technical analysis suggest the move is just another trap.

Bitcoin (BTC) price rallied toward $24,200 on July 28 after a near-10.5% surge that began a day earlier.

The gains appeared after Federal Reserve Chairman Jerome Powell signaled intentions to slow down the Fed’s prevailing tightening spree. This prompted some Bitcoin analysts to predict short-term upside continuation, with pseudonymous analyst CryptoHamster seeing BTC at $26,000 next.

But BTC’s potential to recover entirely from its ongoing bearish slumber appears low for at least three key reasons.

Bitcoin bulls have been duped before

Bitcoin established its record high of $69,000 in November 2022. Since then, the cryptocurrency has declined by more than 60% while undergoing several mini pumps on its way down. 

On the daily chart, Bitcoin has rebounded at least five times since November 2021, securing 23%-to-40% gains on each recovery. Nonetheless, it has continued its correction every time after forming a local price top around its exponential moving averages (EMA) and then falling to new yearly lows.

BTC/USD daily price chart featuring ‘fakeouts.’ Source: TradingView

This time looks no different, with Bitcoin facing a bullish rejection in June and recovering nearly 17% a month later. Notably, BTC price faces interim resistance in its 50-day EMA (the red wave) at around $23,150, with a breakout clearing its way toward $27,000, coinciding with the 100-day EMA (black).

At $27,000, the price would still form a lower high compared to the previous local tops. So, that technically raises the possibility of another bearish continuation move.

High selling, low buying volume

Interestingly, the volume behavior during the ongoing Bitcoin correction shows a greater interest in selling the coin at local tops.

The daily chart below illustrates this by highlighting the volume readings during downtrends and uptrends since November 2021. For instance, the last two big price declines in May and June coincided with a sharp increase in selling volumes.

BTC/USD daily price chart. Source: TradingView

In comparison, the follow-up rebounds to those price declines accompanied modest to lower trading volumes. The ongoing volume behavior looks the same, peaking during the downtrend and dropping as the price recovers.

This suggests a weakening upside momentum, which may lead to another price correction.

BTC to equities correlation flips back to positive

Bitcoin is once again tailing stock market trends despite briefly decoupling from them in early July.

For instance, on July 28, the day-to-day correlation coefficient between Bitcoin and the tech-heavy Nasdaq Composite stood near 0.66. That includes declines in both markets after the U.S. gross domestic product (GDP) plunged for a second consecutive quarter.

BTC/USD and NDAQ daily correlation coefficient. Source: TradingView

That officially confirms that the U.S. has entered a “technical recession,” which could weigh negatively on the stock market. Therefore, Bitcoin’s downside prospects appear high if its positive correlation with the stock market continues.

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 rallies after Fed interest rate hike, but bears can still win Friday’s $1.76B options expiry

BTC bears aim for a $360 million profit in July 29’s $1.76 billion monthly options expiry, but the FOMC interest rate decision could play a decisive factor.

Bitcoin’s (BTC) price has been stuck in a descending channel since July 20 and it is currently heading toward the $20,000 support by the end of July. Adding to this bearish price action, BTC is down 50% year-to-date, while U.S. listed tech stocks, as measured by the Nasdaq-100 index, accumulated a 24% loss.

Bitcoin USD price index, 4-hour. Source: TradingView

As the U.S. Federal Reserve tightens its economic policies by raising interest rates and scaling back debt asset purchases, risk assets have reacted negatively. Fed chair Jerome Powell is set to wrap up a two-day meeting on July 27 and market analysts expect a nominal 0.75% interest rate hike.

Tensions in Europe escalate as the Russian state-controlled gas company Gazprom is slated to cut supplies to the Nord Stream 1 pipeline starting on July 27. According to CNBC, the company blames a turbine maintenance issue, but European officials think otherwise.

Aiding tech stocks’ performance on July 27 was the U.S. Senate approval of the “Chips and Science” bill, which provides $52 billion in subsidies backed by debt and taxes for U.S. semiconductor production. An additional $24 billion of credits for the sector is estimated, aiming to boost the research to compete with China.

For these reasons, traders have mixed feelings about the upcoming Fed announcement and the impact of a global crisis on cryptocurrency markets. As long as Bitcoin’s correlation to traditional markets remains high, especially tech stocks, investors will seek protection by moving away from risk-on asset classes such as cryptocurrencies.

Bulls placed their hope on $24,000 and higher

The open interest for the July 29 Bitcoin monthly options expiry is $1.76 billion, but the actual figure will be lower since bulls were caught by surprise as BTC failed to break the $24,000 resistance on July 20.

Bitcoin options aggregate open interest for July 29. Source: CoinGlass

The 1.18 call-to-put ratio reflects the $950 million call (buy) open interest against the $810 million put (sell) options. Nevertheless, as Bitcoin stands below $23,000, most of the bullish bets will likely become worthless.

For instance, if Bitcoin’s price remains below $23,000 on July 29, bulls will only have $145 million worth of these call (buy) options. This difference happens because there is no use in a right to buy Bitcoin at $23,000 if it trades below that level on July 29 at 8:00 am UTC.

Bears can secure a $360 million profit on Friday

Below are the four most likely scenarios based on the current price action. The number of options contracts available on July 29 for call (buy) and put (sell) instruments varies, depending on the expiry price. The imbalance favoring each side constitutes the theoretical profit:

  • Between $19,000 and $20,000: 400 calls (buy) vs. 19,300 puts (sell). The net result favors bears by $360 million.
  • Between $20,000 and $22,000: 3,900 calls (buy) vs. 11,800 puts (sell). Bears have a $230 million advantage.
  • Between $22,000 and $24,000: 10,300 calls (buy) vs. 8,600 puts (sell). The net result is balanced between bulls and bears.
  • Between $24,000 and $25,000: 14,400 calls (buy) vs. 7,100 puts (sell). Bulls have a $175 million advantage.

This crude estimate considers the call options used in bullish bets and the put options exclusively in neutral-to-bearish trades. Even so, this oversimplification disregards more complex investment strategies.

For example, a trader could have sold a call option, effectively gaining negative exposure to Bitcoin above a specific price, but unfortunately, there’s no easy way to estimate this effect.

Bitcoin bears need to pressure the price below $20,000 on July 29 to secure a $360 million profit. On the other hand, bulls can avoid a loss by pushing BTC above $22,000, balancing the valid bets from both sides. Bulls seem heavily vested to put their losses behind and start August with a clean sheet, but it could still go either way.

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

Core Scientific to increase ASIC server capacity by 75 MW

The Nasdaq-listed Bitcoin miner expects to generate $50 million in annual revenue once the ASIC servers are fully operational.

United States Bitcoin (BTC) miner Core Scientific has signed a new colocation agreement to increase its data center hosting capacity by 75 megawatts (MW), a move intended to showcase the company’s ongoing commitment to boosting its infrastructure capabilities amid the ongoing bear market. 

The new agreement will generate roughly $50 million in annual revenue for Core Scientific once the ASICs are fully deployed, the company announced Tuesday. The agreement includes provisions for prepayments that will allow the company to scale its infrastructure capabilities to host the additional servers.

Deployment of the additional ASICs is expected to commence in the third quarter, with full deployment scheduled to be completed by the end of the year.

“We remain focused on executing our 2022 plans to expand our capacity, support the Bitcoin Network’s continued growth and create value for all our stakeholders, despite current market challenges,” said Mike Levitt, Core Scientific’s CEO.

After posting stellar fiscal 2021 results amid the Bitcoin bull market, Core Scientific has fallen on harder times in recent months. In June, the company was forced to offload 7,202 BTC, worth roughly $167 million at the time, to continue funding operations.

Related: Breaking: Tesla sold 75% of Bitcoin holdings in Q2

Core Scientific currently has 8,497 BTC on its books, worth roughly $177.2 million at current prices, according to Bitcoin Treasuries. MicroStrategy and Tesla are the only publicly-traded companies with more BTC on their balance sheets.

On the topic of Tesla, the electric vehicle maker sold $936 million worth of BTC in the second quarter, which netted the company $64 million in profits.

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

BTC bulls aim to secure a $235 million profit from July 22’s BTC options expiry, but a downside move below $22,000 could nix this plan.

Bitcoin (BTC) briefly broke above $24,000 on July 20, but the excitement lasted less than two hours after the resistance level proved more challenging than expected. A positive is that the $24,280 high represents a 28.5% increase from the July 13 swing low at $18,900.

According to Yahoo Finance, on July 19, the Bank of America published its latest fund managers survey, and the headline was “I’m so bearish, I’m bullish.” The report cited investors’ pessimism, expectations of weak corporate earnings and equity allocations being at the lowest level since September 2008.

The 4.6% advance on the tech-heavy Nasdaq Composite Index between July 18 and 20 also provided the necessary hope for bulls to profit from the upcoming July 22 weekly options expiry.

Global macroeconomic tensions eased on July 20 after Russian President Vladimir Putin confirmed plans to reestablish the Nord Stream gas pipeline flow after the current maintenance period. However, in the course of the last few months, data shows that Germany has reduced its reliance on Russian gas from 55% to 35% of its demand.

Bears placed their bets at $21,000 or lower

The open interest for the July 22 options expiry is $540 million, but the actual figure will be lower since bears have been caught by surprise. These traders did not expect a 23% rally from July 13 to Ju20 because their bets targeted $22,000 and lower.

Bitcoin options aggregate open interest for July 22. Source: CoinGlass

The 1.09 call-to-put ratio shows the balance between the $280 million call (buy) open interest and the $260 million put (sell) options. Currently, Bitcoin stands near $23,500, meaning most bearish bets will likely become worthless.

If Bitcoin’s price remains above $22,000 at 8:00 am UTC on July 22, only $30 million worth of these put (sell) options will be available. This difference happens because the right to sell Bitcoin at $22,000 is useless if BTC trades above that level on expiry.

Bears aim for $24,000 to secure a $235 million profit

Below are the four most likely scenarios based on the current price action. The number of options contracts available on July 22 for call (bull) and put (bear) instruments varies, depending on the expiry price. The imbalance favoring each side constitutes the theoretical profit:

  • Between $20,000 and $21,000: 900 calls vs. 3,000 puts. The net result favors the put (bear) instruments by $60 million.
  • Between $21,000 and $22,000: 2,400 calls vs. 3,000 puts. The net result is balanced between bulls and bears.
  • Between $22,000 and $24,000: 6,600 calls vs. 500 puts. The net result favors the call (bull) instruments by $140 million.
  • Between $24,000 and $26,000: 9,400 calls vs. 0 puts. Bulls take total control, profiting $235 million.

This crude estimate considers the put options used in bearish bets and the call options exclusively in neutral-to-bullish trades. Even so, this oversimplification disregards more complex investment strategies.

For example, a trader could have sold a put option, effectively gaining positive exposure to Bitcoin above a specific price, but unfortunately, there’s no easy way to estimate this effect.

Related: Bitcoin may hit $120K in 2023, says trader as BTC price gains 25% in a week

Bears have until Friday to turn things around

Bitcoin bears need to pressure the price below $22,000 on July 22 to avoid a $140 million loss. On the other hand, the bulls’ best-case scenario requires a slight push above $24,000 to maximize their gains.

Bitcoin bears just had $222 million leverage long positions liquidated from July 17 to 20, so they should have less margin required to drive the price higher. In other words, bulls have a head start to sustain BTC above $22,000 ahead of the July 22 options expiry.

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

Coinbase stock has potential to double in 2022 after plunging 90% from record high

COIN stock can rally to $160 by the end of the year, a mix of technical and fundamental indicators suggest.

Coinbase stock (COIN) price has nearly doubled since its June lows with a potential for much more upside this year, according to a mix of technical and fundamental indicators.

COIN’s symmetrical triangle reversal

COIN has been undergoing a strong bullish reversal after falling by almost 90% from its record high of $368.90 in November 2021.

Coinbase stock price was up over 95% to $75.27 as of July 20’s close when measured from its May 12 local bottom of $40.83. Its recovery led to a symmetrical triangle pattern formation with the price forming a sequence of lower highs and higher lows.

Symmetrical triangles in downtrend typically turn out to be bearish continuation patterns. They resolve after the price breaks below their lower trendlines to fall further. But in rare instances, a symmetrical triangle could form at the end of a downtrend, leading to sharp bullish reversals.

As it seems, COIN has already entered the breakout stage of its symmetrical triangle reversal pattern. Notably, Coinbase stock closed above the structure’s upper trendline on June 28 while accompanying a rise in trading volume, as shown below.

COIN daily price chart featuring symmetrical triangle reversal setup. Source: TradingView

COIN now tests $80 as its interim resistance while eyeing a further upside toward $135. The profit target is measured after calculating the maximum distance between the symmetrical triangle’s upper and lower trendline and adding the outcome to the breakout point.  

The triangle’s upside target appears closer to COIN’s 200-day exponential moving average (200-day EMA; the blue wave in the chart above) near $153. That psychologically raises the possibility of COIN forming bullish wicks toward $153 if it reaches $135 this year.  

That would mean a 102% rally from July 2’s price.

Coinbase valuation: Q1 earnings

Coinbase Q1 earnings were underwhelming due to weaker-than-expected revenue and a substantial drop in monthly transacting users.

The firm has not disclosed any cost management plans in the said earnings call, but a report published by the Financial Times this June shows that it would cut nearly a fifth of its workforce. Also, Coinbase ended its popular affiliation program in July, according to Business Insider.

“Our target price of [COIN] is around $52 [in 2022],” noted Rumak Research, a group of financial analysts, in their recent Coinbase assessment. The given analysis was based on reactions to past market cycles, coupled with their capital asset pricing model (CAPM), as shown below.

Coinbase valuation based on CAPM model. Source: Rumak Research/Seeking Alpha

The stock’s target price comes to be near $160, according to Rumak Research, when considering the current average market risk premium in the United States of 5.6%.

Related: Coinbase to shut down Coinbase Pro to merge trading services

On similar lines, D.A. Davidson analyst Christopher Brendler noted that Coinbase would survive the crypto bear market despite its “financial situation,” including $3.4 billion in long-term debt. Nevertheless, the company is still sitting on $6.1 billion.

“The fact that they have to scale back a little bit, it may not be the best news, but ultimately, I know that they’re not going to be in a situation where they’re struggling to survive,” Brendler told Forbes, adding:

“They have been through it before and I’m confident they’ll be able to get through it again.”

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.

Two Bitcoin price prediction polls, same outcome: $10K BTC is coming

While a classic technical indicator could be hinting at BTC price falling below $13,000 as well.

Bitcoin (BTC) investors in China plan to buy the dip despite an ongoing market correction and a nationwide crypto ban, a new survey shows.

Consensus sees Bitcoin at $10K

A survey of 2,200 people conducted on China-based social media platform Weibo found that 8% would buy Bitcoin when its price hits $18,000, according to Wu Blockchain. While 26% of the respondents prefer to wait until BTC reaches $15,000.

But a majority anticipated the price to fall even further with 40%, saying they would buy BTC at $10,000.

Chinese investors more cautious on Bitcoin than U.S.

Interestingly, another survey conducted by Bloomberg MLIV Pulse earlier in July yielded a similar outcome, with 60% of the net 950 respondents on Wall Street calling for a $10,000 Bitcoin price.

The two polls show a striking similarity in the bearish sentiments of crypto speculators in the United States and China. Nonetheless, on-chain activity shows that investors in the U.S. have been more bullish on Bitcoin versus their Asian counterparts since June 2022.

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

In particular, Bitcoin’s month-to-month price change, which tracks the 30-day change in the regional BTC price, has been positive only during U.S. sessions. Conversely, the metric has only been negative during Asian trading hours, data from Glassnode shows.

Bitcoin month-over-month price change. Source: Glassnode

Technical indicator hints at BTC price below $13K

Simultaneously, weakening technicals are also starting to support further downside, particularly on the larger three-day timeframe.

BTC/USD three-day price chart featuring “bear flag'”setup. Source: TradingView

Bitcoin has been forming a potential “bear flag” pattern that could result in a drop below $13,000 by September, as illustrated above.

As Cointelegraph reported, persistent macroeconomic headwinds for BTC/USD continue to fuel bearish arguments against increasing evidence of a possible price bottom. 

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 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.

Bitcoin’s inverse correlation with US dollar hits 17-month highs — what’s next for BTC?

Market pundits anticipate the dollar rally to either stall or correct by the end of 2022, benefiting Bitcoin.

Bitcoin (BTC) has been moving in the opposite direction of the United States dollar since the beginning of 2022 — and now that inverse relationship is more extreme than ever.

Bitcoin and the dollar go in opposite ways

Notably, the weekly correlation coefficient between BTC and USD dropped to 0.77 below zero in the week ending July 3, its lowest in seventeen months.

Meanwhile, Bitcoin’s correlation with the tech-heavy Nasdaq Composite reached 0.78 above zero in the same weekly session, data from TradingView shows.

BTC/USD and U.S. dollar correlation coefficient. Source: TradingView

That is primarily because of these markets’ year-to-date performances amid the fears of recession, led by the Federal Reserve’s benchmark rate hikes to curb rising inflation. Bitcoin, for example, has lost over 60% in 2022, while Nasdaq’s returns in the same period stand around minus 29.72%.

On the other hand, USD has excelled, with its U.S. dollar index (DXY) — a metric that measures its strength against a basket of top foreign currencies — hovering around its January 2003 highs of 105.78.

BTC/USD vs. DXY vs. NDAQ weekly price chart. Source: TradingView

Will dollar rise further?

The Fed appears compelled to increase benchmark rates based on how traders have priced the front-end derivative contracts.

Notably, traders anticipate the Fed to raise the rates by 75 basis points (bps) in July. They also bet Fed won’t raise rates beyond 3.3% by this year’s end from the current 1.25%-1.5% range.

However, a push to 3.4% by the first quarter of 2023 could have the central bank dial back its aggressive tightening.

That could result in a 50 basis point cut by the end of next year, as shown in the chart below.

Changes in Fed’s interest rate target. Source: TradingView

An early rate cut could happen if the inflation data cools down, thus limiting investors’ appetite for the dollar, according to Wall Street analysts surveyed by JPMorgan. Notably, around 40% see the dollar ending 2022 at its current price levels — around 105.

Meanwhile, another 36% bet that the greenback would correct ahead of the year’s close.

“Foreign exchange is not a linear world. At some point, things flip,” noted Ugo Lancioni, head of global currency at Neuberger Berman, adding:

“I personally have a bias to short the dollar at some point.”

Bitcoin to bottom out in 2022?

In addition, the dollar’s ability to continue its rally for the rest of 2022 could be hampered by a classic technical pattern.

First spotted by independent market analyst Agres, the DXY’s double top pattern is partially confirmed due to its two consecutive highs and a common support level of 103.81.

As a rule of technical analysis, the double top pattern could resolve when the price breaks below the support and falls by as much as the structure’s maximum height, as shown in the chart below.

DXY daily price chart. Source: TradingView

As a result, DXY’s double top profit target comes to be near 101.8, down over 3.25% from the price of July 3.

“The dollar is extremely overbought and overheated,” explained Agres, adding that its correction in the coming sessions could benefit stocks and cryptocurrencies:

“Finally, looking like it [DXY] will topple down hard. In perfect confluence for a melt-up scenario. When [the] dollar goes down, stocks and crypto rally.”

Related: Bitcoin trader says expect more chop, downside, then sideways price action for BTC this summer

Meanwhile, Bitcoin’s “MVRV-Z Score” has also fallen into a range that has historically preceded sharp, long-term upside retracement. This on-chain indicator predicts that Bitcoin could bottom at around $15,600 in 2022.

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’s inverse correlation with US dollar hits 17-month highs — what’s next for BTC?

Market pundits anticipate the dollar rally to either stall or correct by the end of 2022, benefiting Bitcoin.

Bitcoin (BTC) has been moving in the opposite direction of the U.S. dollar since the beginning of 2022 — and now that inverse relationship is more extreme than ever.

Bitcoin and the dollar go in opposite ways

Notably, the weekly correlation coefficient between BTC and the dollar dropped to 0.77 below zero in the week ending July 3, its lowest in seventeen months.

Meanwhile, Bitcoin’s correlation with the tech-heavy Nasdaq Composite reached 0.78 above zero in the same weekly session, data from TradingView shows.

BTC/USD and U.S. dollar correlation coefficient. Source: TradingView

That is primarily because of these markets’ year-to-date performances amid the fears of recession, led by the Federal Reserve’s benchmark rate hikes to curb rising inflation. Bitcoin, for example, has lost over 60% in 2022, while Nasdaq’s returns in the same period stand around minus 29.72%.

On the other hand, the dollar has excelled, with its U.S. dollar index (DXY), a metric that measures its strength against a basket of top foreign currencies, hovering around its January 2003 highs of 105.78.

BTC/USD vs. DXY vs. NDAQ weekly price chart. Source: TradingView

Will dollar rise further?

The Fed appears compelled to increase benchmark rates based on how traders have priced the front-end derivative contracts.

Notably, traders anticipate the Fed to raise the rates by 75 basis points (bps) in July. They also bet Fed won’t raise rates beyond 3.3% by this year’s end from the current 1.25%-1.5% range.

However, a push to 3.4% by the first quarter of 2023 could have the central bank dial back its aggressive tightening.

That could result in a 50 basis point cut by the end of next year, as shown in the chart below.

Changes in Fed’s interest rate target. Source: TradingView

An early rate cut could happen if the inflation data cools down, thus limiting investors’ appetite for the dollar, according to Wall Street analysts surveyed by JPMorgan. Notably, around 40% see the dollar ending 2022 at its current price levels — around 105.

Meanwhile, another 36% bet that the greenback would correct ahead of the year’s close.

“Foreign exchange is not a linear world. At some point, things flip,” noted Ugo Lancioni, head of global currency at Neuberger Berman, adding:

“I personally have a bias to short the dollar at some point.”

Bitcoin to bottom out in 2022?

In addition, the dollar’s ability to continue its rally for the rest of 2022 could be hampered by a classic technical pattern.

First spotted by independent market analyst Agres, the DXY’s “double top” pattern is partially confirmed due to its two consecutive highs and a common support level of 103.81.

As a rule of technical analysis, the double top pattern could resolve when the price breaks below the support and falls by as much as the structure’s maximum height, as shown in the chart below.

DXY daily price chart. Source: TradingView

As a result, DXY’s double top profit target comes to be near 101.8, down over 3.25% from today’s price.

“The dollar is extremely overbought and overheated,” explained Agres, adding that its correction in the coming sessions could benefit stocks and cryptocurrencies.

“Finally, looking like it [DXY] will topple down hard. In perfect confluence for a melt-up scenario. When [the] dollar goes down, stocks and crypto rally.”

Related: Bitcoin trader says expect more chop, downside, then sideways price action for BTC this summer

Meanwhile, Bitcoin’s “MVRV-Z Score” has also fallen into a range that has historically preceded sharp, long-term upside retracement. This on-chain indicator predicts that Bitcoin could bottom around $15,600 in 2022.

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