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Bitcoin Might Spike by 10% as Ethereum Already Flirting with $1,200, Here's Why

Thu, 07/07/2022 - 14:22
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Arman Shirinyan
Cryptocurrency market might feel short-term relief if U.S. Dollar's party is finally over
Bitcoin Might Spike by 10% as Ethereum Already Flirting with $1,200, Here's Why
Cover image via stock.adobe.com

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As U.Today has mentioned before, the U.S. Dollar rally is one of the main fuels of Bitcoin's selling pressure as the negative correlation between the two assets remains at an extremely high level, but the whole situation may change sooner rather than later.

Strong USD pushes BTC down

The effect of the most recent rate hike and the overall hawkishness of the Fed pushed the value of the currency higher than the market would have expected. With the bleeding Euro, USD showed itself as one of the strongest currencies in the world, creating pressure on stocks and digital assets.

DXY Chart
Source: TradingView

The 3% rally on DXY, which is high enough, considering the index's volatility, could come to the end according to the Relative Strength Index divergence and a cut-off between FOMC meetings.

Ethereum is getting ready for rally first

Some cryptocurrencies are not waiting for the U.S. Dollar's derailing and are already flirting with local resistance levels. For example, Ethereum has successfully reached the local resistance of $1,200, despite remaining pressure on the digital assets market.

Ethereum chart

Previously, U.Today has covered how ETH is getting ready for the fourth test of the upcoming technical resistance that it could not break for the last few months. One of the main factors that speaks in favor of an upcoming breakthrough is the fading volume of the current downtrend.

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Elon Musk Says He Will Continue Supporting Dogecoin "Wherever Possible"

Institutions are also supporting Ethereum actively as the discount for Grayscale's Ethereum fund shrank massively, which shows that investors see Ethereum as an undervalued asset that may offer a greater return in the future, compared to Bitcoin.

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About the author

Arman Shirinyan is a trader, crypto enthusiast and SMM expert with more than four years of experience.

Arman strongly believes that cryptocurrencies and the blockchain will be of constant use in the future. Currently, he focuses on news, articles with deep analysis of crypto projects and technical analysis of cryptocurrency trading pairs.