Bitcoin (BTC) extended losses on July 21st on Wall Street after a major resistance level failed to hold as fresh support.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
Dollar rises to put pressure on risky assets
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD dropping to $22,340 on Bitstamp after the opening bell, 8% below the local high.
The pair’s advance was challenged by Tesla, which revealed that it sold 75% of its BTC position at a loss. Then the macro events added to the Bitcoin woes in the form of a new strength of the US dollar and a sudden rate hike from the European Central Bank (ECB) to combat inflation.
US Dollar Index (DXY) candlestick chart. Source: TradingView
At the time of writing, the US Dollar Index (DXY) was back at 107, up 0.6% in one hour as US stocks on the contrary saw modest losses.
Meanwhile, in Europe, the European Central Bank’s decision failed to improve the euro’s fortunes, reversing early gains as the eurozone faced fresh political fallout in Italy.
“Curious to see if we’ll have a similar crash in stocks as we did before,” tweeted popular trader Josh Rager, looking at the S&P 500 fractal index from late May.
“Of course, this will affect the price movement of $BTC and cryptocurrencies.”
The overall impact has already cost Bitcoin the 200-week and 50-day moving averages at the time of writing, both remaining at $22,800.
“Unfortunately for the bulls, BTC lost the 50-day moving average and the major 200-week moving average,” the chain analysis resource Material Indicators wrote in part of its latest update, adding that the closest macro support level is now lower. Just under $20,000.
For the famous Crypto trader and analyst Tony, $21,700 was now the level to keep.
Comparing 2022 to previous bear markets, meanwhile, he argues that Bitcoin should stay in line for some upside before another downward move occurs — a perspective echoed elsewhere this week.
Echo Altcoins Losing Momentum
On the cryptocurrency, volatility has been common as large-cap coins have faced uncertain headwinds.
Related: Price Analysis 7/20: BTC, ETH, BNB, XRP, ADA, SOL, DOGE, DOT, MATIC, AVAX
Ether (ETH), previously the top performer in the top 10 cryptocurrencies by market cap, dropped as much as 9.7% overnight.
ETH/USD candlestick chart (Binance). Source: TradingView
At the time of writing, ETH/USD is hovering around $1,500, while Cardano (ADA) and Solana (SOL) are also down around 10% in 24 hours.
Commenting on the outlook, Jonah Van Bourg, head of trading at crypto liquidity provider Cumberland, cited proof of stake shift in Ethereum as one factor to remain bullish on the largest altcoin.
“While price action in the recent past has been technical and closely related to macro, this move has been fundamental to cryptography: the Sepolia testnet was successfully integrated into proof of stake on July 6th, paving the way for major network integration in early fall.” , which is one of a series of tweets posted on Reading Day.
