Bitcoin heads to US midterms as research says dollar ‘closing in’ on a market top
2022.11.07 11:10
Bitcoin (BTC) stayed lower at the Nov. 7 Wall Street open as the day before the United States midterm elections opened to flat equities performance.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
Crypto wobbles on FTX woes
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD nearing $20,600 at the time of writing — a three-day low.
Volatility was expected around the midterms and the Consumer Price Index (CPI) print for October later in the week.
An additional hurdle in the form of controversy over trading platform FTX added to the market’s cold feet, with commentators wary of unnecessary damage to growth.
“This whole thing is incredibly bad for the industry, and especially for retail,” popular trader and analyst Pentoshi summarized.
“Retail is the one who pays for it when war is waged. But it can also end up with unintended consequences. Unfortunate to see.”
Bitcoin had headed south overnight amid comments from Changpeng Zhao, CEO of the largest global exchange Binance, in which he confirmed that the exchange would be ridding itself of FTX’s in-house cryptocurrency, FTX Token (FTT).
William Clemente, co-founder of crypto research firm Reflexivity, offered a silver lining in the form of increased value for decentralized exchanges (DEXs) going forward.
“Similar to how the mismanagement of risk from centralized crypto lenders earlier this year laid out the bullish case for DeFi, this centralized exchange drama is also laying out the bullish case for DEXs,” he tweeted, referring to the Terra debacle and associated repercussions.
A look at the top 10 cryptocurrencies by market capitalizati showed mixed performance on the day, with 24-hour losses heaviest for Solana (SOL), down 12.4%.
Back on Bitcoin, trader Il Capo of Crypto stayed close to an existing theory of $21,500 marking a local top to come, which would be followed by more severe downside.
“21500 and nuke. Do it,” he wrote on the day.
That theory included a target macro low of $14,000, in stark contrast to other forecasts, which called for $30,000 within weeks.
Analyst: DXY “key to everything”
Both the S&P 500 and Nasdaq Composite Index were meanwhile unmoved ahead of the midterms.
Related: Funding rates hit 6-month high before CPI — 5 things to know in Bitcoin this week
The U.S. dollar index (DXY), busy attempting a reprieve from last week’s losses, circled 110.5 at the time of writing, unable to find bullish momentum.
Precising research into macro markets, Raoul Pal, founder and CEO of Global Macro Investor, called dollar weakness “the key to everything right now.”
“We’re not totally convinced that we can’t make a final push higher towards 117 but we’re closing in on a top,” the research piece added.
U.S. dollar index (DXY) 1-hour candle chart. Source: TradingView
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