US dollar crushes gold – Bitcoin has hit its lowest lows in recent time, lately, occasioned by a recent violent surge of the U.S dollar on July 5, this seemingly affected gold and other risk assets.
A reliable data shows that BTC/USD retreated to $19,281 on Bitstamp to mark the independent day weekend. The pair have seen last minute gains on the 4th.
However, the return of the Wall Street trading was championed by USD strength laying waste to gains across risk assets and safe havens as the US dollar crushes gold.
With recourse to the day under review, Bitcoin traded $1,000, while spot gold shed over 2% and U.S. equities markets as well fell.
The S&P 500 was down 2.2% as at that time, while the Nasdaq composite Index lost 1.7%.
On the contrary, the U.S. index hits 106.59, a level not seen since December 2002 and above previous breakouts from Q2 this year.
Sequel to this, Bitcoin analysts had to wait for signs of a reversal trend to provide some relief to crypto markets.
According a popular crypto contributor, Michael van de Poppe;
“Euro hitting record levels, $1.033 at this point, last seen in the year 2002 – 2003 and DXY, of course, shooting up like a rocket,” noting that the euro was heading towards USD parity.
Another analyst, Caleb Frazen, a senior market analyst at Cubic Analytics, pointed to how the DXY shed light on investor sentiment over the health of the entire economy.
“Over the past week, yields are falling but the dollar keeps rising. This trend proves that investors are rushing to safety, with heightened fears of recession.”
Crypto fear hits 2-months high
It could be said that volatility finds its way back into the crypto markets, however, sentiment has not been seen to reflect the impact of a rampant dollar.
Mathematically, the crypto Fear and Greed index stood at 19/100 on the day, which is still indicative of “extreme fear” however, its highest reading since before the Terra LUNA debacle in May.
Investment manager, ARK invest revealed that it was still neutral to positive on BTC under current circumstances.
Meanwhile Edris, a contributor to on-chain analytics platform CryptoQuant, voiced caution about making conclusions over any form of recovery as it stands.