(Kitco News) - Bitcoin (BTC) bulls are struggling to regain their composure on Wednesday after the previous day’s plunge below support at $19,000 put a halt to the building momentum being generated by the Ethereum (ETH) Merge.
Data from TradingView shows that the market hit a point of max pain in the early hours on Wednesday, with BTC hitting a low of $18,550 before bullish reinforcements arrived in an attempt to bid its price back above support at $19,000. At the time of writing, that attempt has thus far failed, and Bitcoin is trading at $18,925.
BTC/USD 4-hour chart. Source: TradingView
As noted in the morning Bitcoin update from Kitco Senior Market Analyst Jim Wyckoff, BTC price is now at a nine-week low, and “bears have quickly regained the firm near-term technical advantage and have restarted a price downtrend on the daily bar chart.”
Moving forward, Wyckoff warned that “The path of least resistance for prices is now sideways to lower in the near term.”
Ether, likewise, was hit hard by Tuesday’s downturn after rallying in the early trading hours following the successful integration of the Bellatrix hard fork.
ETH/USD 4-hour chart. Source: TradingView
At the time of writing, Ether is trading at a price of $1,540, marking a decline of 8.71% from Tuesday’s high.
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The surging dollar takes a toll on global financial markets
The weakness in the crypto market has been exacerbated by the surging US Dollar, which hit a multi-decade high on Tuesday as asset prices plunged across global financial markets.
A pullback in the DXY from yesterday’s high of 110.8 to its current value of 110.2 has brought some relief to the markets, but it remains to be seen if this will be an extended reprieve or merely a brief interlude before the DXY resumes its trek higher.
Insight into what to look out for next was provided by independent market analyst Michaël van de Poppe, who posted the following tweet highlighting the importance of the next 48 hours:
We finally got our sweep of the lows yesterday, resulting in #Bitcoin touching $18.5K.
— Michaël van de Poppe (@CryptoMichNL) September 7, 2022
In the coming 48 hours, I'm interested to see, whether;
- #Bitcoin can reclaim $19.3K
- ECB and Powell speaking
- Reaction on US10-yields and DXY
Can be giving a direction of the markets.
As for now, the pain in the crypto market shows no sign of abating anytime soon, so its best to just buckle down and ride out this volatility storm until a more clear picture emerges in the future.
The overall cryptocurrency market cap now stands at $950 billion, and Bitcoin’s dominance rate is 38.1%.
