Bitcoin Continues Down and Euro Reaching Parity! | Daily News 12/7/22
Continuing from yesterday’s price action, the dip 📉 has continued seeing Bitcoin trade under $20K and Ethereum now sitting just over the $1000 level, as of writing. The general sentiment toward crypto assets has declined yet again. However, is there further fear on the horizon? Or are we to bounce and consolidate around the same levels? 🤔
💹 As for the tech stocks, the NASDAQ and S&P 500 both traded weaker and ended the close of the day at -2.26% and -1.15%, however, futures are up ahead of the earnings announcements for major currencies. The Euro has also almost reached parity, being 1:1 with the USD which has also led the DXY to rise. We will explain more as to why this affects crypto below.
Let's discuss further 👇
So, Bitcoin (BTC) continued its decline 🔻 since last weekend's highs of $22K, proving once again that volatility in the market is ever-present. As of writing, BTC is currently valued at just under 🔴 $19,800, having dropped almost 12% since Friday and it looks like the trend is continuing.
The BTC/USDT chart on the hourly time frame showing current price action. Where do you think we are headed?
The bullish trendline yesterday had broken through, and surpassed the psychological $20K level and declining 👀! The next support level to hit is the $19,387 mark, and if that is to break? Then direction could lead the price to the round number of $19,000, where it held good support for the first week of July. One of the bigger factors hanging on cryptocurrencies and other risk assets has been the strength of the United States Dollar index (DXY) 💲. Combining this with rising inflation and falling economic data such as job and earnings reports, for instance, the DXY strength is a signal that an economic slowdown is coming as well as a recession. Because of this, BTC now finds itself trying to find another local bottom 🍑 which is around the last bull cycle of 2017 high of just under $20,000.
Ethereum (ETH) has been following the same decline 📉 and is now even nearer to its psychological mainline support of $1000, and is currently valued at $1069. As it has just broken through its immediate support, its next support level to break 👀 will be $1045. It will be interesting to see bulls vs bears today, to see what ETH has in store in the next 24 hours!
The ETH/USDT chart on the hourly time frame heading towards the psychological support level of $1000.
🟢 Polygon (MATIC) has outperformed the whole crypto market and is also one of the very few in the green, being up almost 6% in the last 24 hours. 👉 Read our article on how Polygon could well be the next big future in the crypto space!
📊 The stock market has seen some downwards pressure 🔻 with the S&P 500 closing the day yesterday -1.15% and the NASDAQ closing -2.26%. There hasn't been much movement since the day prior as it seems that investors are gearing up for fresh inflation data and earnings-based indicators this week such as tomorrow with the release 🕵 of the CPI report.
💶 Big movement in the markets has been primarily led by the Euro reaching almost parity with the US dollar, for the first time since 2002 😱 and is currently trading at 1.0003 as of writing. This is the first time in 20 years that these levels have been seen, spurred on by the Euro zone’s energy supply crisis and the fears of a recession that depress the 🌍 global markets.
📍 Why does this affect crypto? Well, the Euro makes up 56% of the dollar index (DXY), and with the latest downturns, it has resulted in the strength of the dollar to rapidly increase ⤴️. And as we’ve spoken about many times before, as the strength of the dollar goes up, the stress on Bitcoin increases and restricts BTC to grow, as it trades against the dollar.
📖 In case you missed it, click here to read our weekly economic events and forecasts blog for this week, so you are always up to date with what's going on and how it can affect the market.
- Bitcoin continues to slip down, now under the $20K level!
- Altcoins follow, however, MATIC is one of the only alts to be proving its worth.
- The stock markets are down slightly, all awaiting economic data from the CPI report tomorrow.
- The EURO almost reached parity with the dollar, for the first time in 20 years!
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