Bitcoin Price Prediction as US Dollar Index (DXY) Climbs

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Bitcoin The price came under intense pressure this week as the VIX and the US Dollar Index (DXY) surged. It broke below the important support level at $20,000 and is trading at $19,125. BTC/USD and BTC/GBP have crashed over 50% this year.

The US dollar index jumps

The price of BTC has seen a sharp decline over the past few weeks as the US Dollar Index has rebounded. According to Bloomberg, Bitcoin surged to $112.8, which was the highest level in over 2 decades. This came as the pound fell to its lowest level since 1987 and is now approaching the parity level.

The euro fell below parity and is at its lowest level for more than 20 years. Other currencies like Swedish Krona, Japanese Yen, and Swiss Franc have also seen a strong downward trend lately.

The strength of the US dollar index continued after the Federal Reserve continued its hawkish tone this week. At its meeting, the bank decided to raise interest rates by 0.75%, bringing the increase since the start of the year to 300 basis points. Notably, officials warned that the bank would continue to offer giant rate hikes later this year.

The impact of the hawkish Fed became visible in the market as Bitcoin price crashed below $20,000. US stocks fell, the Dow Jones, S&P 500 and Nasdaq 100 indices crashing more than 1.80% on Friday. Bitcoin has a close correlation with US stocks.

At the same time, bond yields continued to soar, with the 2-year rate rising to 4.2%, its highest level in more than a decade. Yields on 10-year and 30-year government bonds rose to 3.68% and 3.61%, respectively.

Therefore, it is likely that BTC price will continue to struggle in the coming days as the Fed maintains its hawkish tone.

bitcoin price prediction

The daily chart shows that the price of BTC has been in a strong downtrend over the past few months. It broke below all moving averages and broke through the important support level at $20,704, which was the lowest point on June 26th. The Relative Strength Index (RSI) moved slightly below the neutral point.

Therefore, it is likely that Bitcoin price will continue to decline as sellers target the next key support level at $18,000. A move above the resistance level at $21,000 will invalidate the bearish view.

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