Bitcoin (BTC) headed to multi-day highs following the Wall Street opening on August 23 when US economic data stumbled the dollar.
Dollar Suffers As Data Shows “Squeezed” Incomes
Data from Cointelegraph Markets Pro and TradingView followed BTC / USD while at the time of writing it stood at $ 21,700, close to resistance from last week’s nearly 12% drop.
The pair gained momentum as the U.S. Purchasing Managers Index (PMI) prints for August showed a drop from the previous month, hitting its lowest levels since May 2020 at the height of the first round of COVID-19 lockouts. .
“The S&P Global Flash US Services Business Activity Index stood at 44.1 in August, down from 47.3 in July, indicating a further reduction in overall services activity,” reads a press release from the curator S&P Global.
“The decline in business activity was overall marked and the fastest since May 2020. Service providers noted that interest rate hikes and inflation held back customer spending as disposable income was reduced. “.
Damn! The American composite #SMEs just dropped to 45.0! That’s close #recession levels. The Services PMI fell to 44.1, where it was expected to rise to 49.8. pic.twitter.com/GwSKfnOXS3
– Jeroen Blokland (@jsblokland) 23 August 2022
The implicit slowdown in demand had an immediate ripple effect on dollar strength, with the US dollar index (DXY) falling from its new 20-year high.
The inversely correlated DXY had instead gained rapidly in the previous days, this coinciding with US stocks facing resistance and Bitcoin having seen more trips below $ 21,000.
“Aug. PMI Composite Index fell to 45 from 47.7 in July. It was expected to rise to 49.2 “, Peter Schiff, gold backer reacted.
“The Services PMI fell to 44.1, the lowest since May 2020 and the Mfg. Fell to 51.3, the lowest since July 2020. The US PMI is weaker than any PMI in Europe or Asia.” .
The S&P 500 Index and Nasdaq Composite were up 0.25% and 0.45% respectively at the time of writing
BTC bulls face a challenge of $ 21,700
Analyzing what could be the next step for risky assets, commentators were hoping for a rally in stocks in the wake of a falling dollar.
Related: Lossing Bitcoin Addresses Hit 1 Month High As BTC Price Repeats $ 21,000 Test
Popular Twitter account Game of Trades called the S&P 500 “extremely oversold in the short term” based on the Relative Strength Index (RSI) data.
“Watch out for any potential bullish divergences the RSI has picked up along the way,” part of a new update light.
On Bitcoin, the optimism of some has also centered on a return to the highs of the range since June, with a “clean break” above $ 25,000 which was the breakout of the deal for the appearance of $ 28,000 or more.
You are ready? pic.twitter.com/dZ0NI1JleS
– KALEO (@CryptoKaleo) 23 August 2022
For the Material Indicators chain analysis resource, meanwhile, it was $ 21,700 that needed to be deciphered as a first step.
“If we no longer see BTC offers exceeding $ 21,000, the illiquidity to the downside (dark areas) will be exploited,” he says. put on guard along with a chart of the support and resistance levels on the Binance order book.
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