Bitcoin Clings to $22K as US Dollar Strength Rises to December
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Bitcoin Clings to $22K as US Dollar Strength Rises to December

written by John Murphy | March 9, 2023

Bitcoin’s price has been range-bound between $22,000 and $24,000 for the past few days, as the US dollar’s strength has risen to its highest level since early December. The leading cryptocurrency hit an all-time high of $24,300 earlier this week but has failed to maintain that momentum and now appears to be consolidating at its current level.

Analysts say that the strength of the US dollar is causing a minor pullback in the cryptocurrency markets as investors look to hedge against inflation and seek safer assets amid the ongoing pandemic. The US dollar index, which tracks the greenback’s strength against a basket of other currencies, rose to its highest level since the first week of December on Thursday, following the Federal Reserve’s decision to keep interest rates near zero.

Bitcoin threatens to remove $22,000 as support as BTC price falls due to booming DXY.

Bitcoin BTC Ticker Drops His $22,434, Hits 3-Week Low On March 8th.

“Bitcoin not showing the strength I initially wanted to see (slight bounce yesterday taking place),” Cointelegraph contributor Michaël van de Poppe, founder, and CEO of trading firm Eight, summarized.

“In this case, we are looking for more downward momentum to break the $21.2k low before the bounce occurs. If you want $30,000, you need to collect $23,000. 

Data from Markets Pro and TradingView show BTC/USD plummeting to $21,858 on Bitstamp. The pair is trying to hold $22,000 as support at the time of writing and is still far from the traders’ downside target of $21,300.  

Bitcoin’s correlation with the US dollar has been increasing lately, with more investors looking to the cryptocurrency as a hedge against inflation and uncertain economic conditions. However, this correlation also means a stronger dollar could suppress Bitcoin’s price. Investors may look to shift their focus to traditional safe-haven assets like gold.

Despite the current consolidation, analysts remain bullish on Bitcoin’s long-term prospects, citing the cryptocurrency’s increasing adoption by institutional investors and mainstream companies. Some also expect Bitcoin’s price to surpass $30,000 in the coming weeks as more investors seek exposure to digital assets and the demand for the cryptocurrency continues to grow.

The cryptocurrency market remains highly volatile and vulnerable to sudden price drops. Some experts predict that the current run may continue in the long term. This is largely due to the growing adoption of digital currencies and the wider acceptance of Bitcoin as a legitimate asset class.

Bitcoin’s price may fluctuate due to market trends and the global economic outlook. Many investors are paying close attention to the US government’s stimulus efforts, which may impact the value of both the dollar and cryptocurrencies.  

Overall, while short-term market fluctuations are expected, the long-term outlook for Bitcoin remains positive as more investors look to diversify their portfolios and seek out alternative assets to traditional investments. As such, analysts remain optimistic about the cryptocurrency’s future growth potential, even as it faces some headwinds in the near term.