As Wall Street opened on Feb. 6, Bitcoin remained static as research pointed to an “intriguing dynamic” in BTC prices. The way dollar charts will behave after Fed’s decisions should make it clear whether a bear market is headed for crypto markets or not.
Bitcoin Can Draw A Volatile Chart
As United States equities trading began, Bitcoin/USD remained close to $22,800 without flinching. Before the weekly close of markets, BTC had experienced a skyrocket in volatility that saw it fall back from its six-month highs beyond $24,000. This rattled many investors and caused them to question whether we can safely anticipate a dip below $20k or not. Now Material Indicators is keeping an eye on two classic chart features – a “golden cross” for daily timeframes and also a “death cross” for weekly frames, respectively.
Representing interplay between the 50- and 200-day moving averages, a golden cross and a death cross traditionally indicate upcoming bullish and bearish moves, respectively. Such is their notoriety that automated trading tools may buy or sell as required should one or both events occur.
On the day, Material Indicators tweeted that a “Golden Cross” on Bitcoin’s D chart could spark some buying. Simultaneously, an impending Death Cross on the W chart will cause algotrading bots to sell. Also mentioned were upcoming remarks from Jerome Powell, Chair of the Fed; his words regarding inflation policy would likely affect markets profoundly when they are delivered on February 7th. Co-founder Keith Alan noted this as an “interesting dynamic evolving.”
The Current Movement in Dollar is Bad News for Cryptocurrency Markets
At the beginning of the day, U.S. stocks had slightly decreased, with both S&P 500 and Nasdaq Composite Index going down by 0.8% and 1.1%, respectively; Asian stocks also witnessed a similar fate during this period as well due to a surge in US Dollar Index (DXY). Analysts fear that such an upward trajectory will further pressure risk-related assets since DXY is now trading above 103.6, its highest point reached since Jan 9th, which may dent the crypto rally’s success even more than previously anticipated.
Roman, a popular trader and analyst, commented on the dollar’s effort to reclaim its yearly uptrend. He stated that this could be detrimental for crypto and stock investments as it signals either a pause in market growth or an outright bear market. He said this week is especially important; if the $SPX drops below 4100, the markets will return to macro bearishness.
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