A full reversal and then some reversal for BTC means the bulls have come to terms with months of resignation.
Bitcoin (BTC) hit its lowest level in more than two months on May 5 as volatility returned with renewed vigor on Wall Street.
1-day BTC/USD candlestick chart (Bitstamp). Source: Trade View
DXY celebrates the decline in stocks and cryptocurrencies
Data from Cointelegraph Markets Pro and TradingView painted a worrying picture for Hodler as BTC/USD fell to $36,520 on Bitstamp.
Bitcoin covered losses that were at 8.3% at one point, only recovering from the price last seen on February 24 of this year.
As Cointelegraph reported, these results were accompanied by turbulence in U.S. markets as stocks pared previous gains to change the economic outlook. The “priced in” rate hike by the Federal Reserve turned out to be a red herring.
“BTC breaks below 37k after yesterday’s nasty bull trap. A good lesson for many who persist in fighting the trend,” reacted Chads, a popular trader, on the same day.
At the time of writing, BTC/USD is trading around $37,000, recouping a modest chunk of ground lost in the first two hours of Wall Street’s session. In comparison, the Nasdaq 100 fell 4.5% and the S&P 500 fell 3.2%.
Even the news that blockchain protocol Terra had acquired $1.5 billion worth of BTC to shore up its stablecoin TerraUSD (UST) didn’t lift sentiment.
“Can you imagine how disastrous it would be for the central bank’s credibility (trust in the fiat system) if this stock market continues to turn in the coming weeks and they have to aggressively change policy within a month or two? Confidence has already been shaken…” podcast host Preston Puffy commented on the relative stability’s return.
Meanwhile, this action has been a boon for the US dollar, as shown by the US Dollar Index (DXY), which has recouped previous losses and retested its highest level in twenty years.
At the time of writing, the DXY is hovering around 104, up 1.2% on the day.
US Dollar Index (DXY) 1 hour candlestick chart. Source: Trade View
Bulls have been feeling the most pressure since January
Amid the chaos, previous bullish theories on BTC covering longer timeframes have been put to the test.
Related: ‘Likely’ BTC Price To Hit $100K Before Bitcoin Hits $30K, Forecast Says
Among them was one based on Bitcoin (OBV) balance sheet volume.
OBV, a cumulative volume measure used to gauge buying and selling pressure, was actually calling for BTC price to rise from January’s $32,000 low, previously popular Twitter account IncomeSharks reported on May 5.
A series of higher lows since then gave the impression that a larger pullback could have been avoided based on the OBV data.
However, as Cointelegraph reported, price targets of $30,000 or less in the coming months have only been raised in recent weeks.
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