Bitcoin (BTC) rallied to daily resistance at the open of Wall Street trading on Aug. 3. US stocks also rallied after the easing of tensions in Taiwan.
Stocks gain as the dollar retreats
Data from Cointelegraph Markets Pro and TradingView showed that the BTC/USD pair returned to the area just below $23,500, which had acted as resistance since the beginning of the month.
The pair had held the same zone as support, and was currently deciding if a new resistance/support flip was on the cards.
For popular Crypto trader Tony, $23,500 was therefore the price to watch for going long on BTC.
Keep it simple this morning on #bitcoin ..
– Long above resistance at $23,500
– Short below support at $22,650 pic.twitter.com/onXXRvdXx8— Crypto Tony (@CryptoTony__) August 3, 2022
On the downside, the operator Pentoshi highlighted the zone between $21,800 and $22,000 as the “end line” for BTC.
For their part, stocks performed decently on the day; the S&P 500 and the Nasdaq Composite Index gained 1% and 2%, respectively, after opening. The news that the Speaker of the US House of Representatives, Nancy Pelosi, had started a visit to Taiwan without any repercussions from China raised the mood.
The US Dollar Index (DXY), following strong gains typical of the start of the week, consolidated after facing resistance at 106 on the hourly charts. The lows of the day coincided with the highs of May, according to the analysis, with the possibility of new two-decade highs being reached in what would represent friction for cryptocurrencies and risk assets.
“As the dollar begins to show possible signs of strength (and yields begin to rise), will stocks continue to hold out? Price action through 2022 tells us no,” warned the market analyst; Caleb Franken.
ARK signals an “emerging risk environment”
Meanwhile, a summary of the status quo of Bitcoin and Ether (ETH), investment firm ARK Invest painted a mixed picture of where the market could go in 2022.
In the latest issue of their investigative series, “The Bitcoin Monthly,” ARK analysts, including CEO Cathie Wood, stated that “all eyes” are now on macro factors.
“Given the positive correlation between Bitcoin and the US stock market since the COVID pandemic, the fact that the US is the main driver of Bitcoin prices suggests a new risky market environment,” they wrote.
“The United States has probably accounted for the majority of the buying interest in Bitcoin during the July rally,” ARK added.
However, the chances of a prolonged rebound are uncertain. Describing its stance as “neutral”, ARK offered a potential “unlikely” downside target of just under $14,000.
“Comparable to the drop at the height of the crash in the wake of the COVID pandemic, Bitcoin price fell short of its delta cost basis, a price-adjusted cost basis that subtracts the moving average from the market price of the entire life of its market cost base and serving as Bitcoin’s strongest support level,” the report states.
“Although the probability of hitting its delta cost basis has decreased, Bitcoin’s downside risk in a bear market technically remains at its delta cost basis, currently $13,890.”
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should do your own research when making a decision.
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the full amount invested may be lost. The services or products offered are not aimed at or accessible to investors in Spain.