Bitcoin (BTC) ran out of steam near $23,000 on June 16 after the biggest United States key rate hike in nearly thirty years.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
Dollar strength wobbles after rate hike news
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD reaching highs of $22,957 on Bitstamp after the Federal Reserve confirmed a 0.75% hike in June — its largest since 1994.
Momentum did not last long, however, and at the time of writing, the pair had shed $2,000 to return to $21,000 at the new Wall Street open.
$BTC Did indeed fail to hold the mid range and fell back to the range low which it has held so far.
This range low is my line in the sand if BTC doesn’t want to revisit the lows and possibly test sub $20K levels.
Holding here and we can target the mid range (and higher) again. https://t.co/mFDHX0B57x pic.twitter.com/mEqOoGA9gK
— Daan Crypto Trades (@DaanCrypto) June 16, 2022
Popular trader Crypto Tony eyed the U.S. dollar on the back of the Fed’s decision, with an about-turn in USD strength key to a possible Bitcoin bottom.
The U.S. dollar index (DXY), after spiking to twenty-year highs again after the announcement, began retracing through June 16.
“Coming up to a big resistance zone on the dollar, which if we can reject from here and dump. The Bitcoin bottom may be in soon,” he told Twitter followers.
“However, I am looking for another tap up before the drop, which coincides with another leg down on $BTC so keep an eye on this.”U.S. dollar index (DXY) 1-day candle chart. Source: TradingView
Veteran trader Peter Brandt, well known for his Bitcoin bottom calls, meanwhile said that a retest of $20,000 would spark not a genuine recovery but a “relief rally.”
“Basically, the bear market is nowhere close to over for crypto. Was hoping for a nice rally here but the market may need some more time,” commentator Josh Rager added in part of a tweet.
EU, Japan cracks show
As U.S. equities opened down after rebounding on the Fed news, concerns around other world economies were just as fresh in the minds of many traders.
The European Union was dealing with a blowout in Italian bonds, while in Japan, currency weakness in the yen was becoming increasingly unnerving.
The idea of yield curve control needs to be retired. #Japan is breaking. pic.twitter.com/P4YL3kBLzS
— Ansel Lindner (@AnselLindner) June 16, 2022
Due to a combination of a strong dollar and ongoing quantitative easing — not tightening — USD/JPY hit its highest since the late 1990s this week.
Both economies’ struggles were covered by Arthur Hayes, former CEO of derivatives platform BitMEX, in blog posts on Bitcoin’s future in recent months.
For Hayes, the macro turmoil, which would ultimately cement Bitcoin’s status, was already playing out but the pain would precede any form of relief for the largest cryptocurrency and its investors.
USD/JPY 1-month candle chart. Source: TradingView
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