Bitcoin (BTC) reclaimed $39,000 on April 27 after another night of pain saw BTC/USD hit its lowest levels since mid-March.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
"All assets suffer" at hands of rampant dollar
Data from Cointelegraph Markets Pro and TradingView showed the largest cryptocurrency trading at $39,200 on Bitstamp at the time of writing, up 2.5%.
Tuesday had seen fresh trouble as soon as Wall Street trading began, Bitcoin following stocks downhill once again to hit $37,700 twice.
Despite that area already being on the radar as a liquidity grab opportunity, some were far from convinced that the sell-off was done.
The current relief, popular trader Kaleo argued, was simply a form of a dead-cat bounce and the real pain would begin when momentum faltered.
Dump after this bounce is over with is gonna be so brutal— K A L E O (@CryptoKaleo) April 27, 2022
"Well, this price action on Bitcoin isn't shouting too much for upside, at this point. Tricky as it's giving back every upwards push again," Cointelegraph contributor Michaël van de Poppe added.
As throughout the week, the U.S. dollar showed no signs of aborting its bull run, adding pressure to crypto as U.S. dollar currency index (DXY) challenged multi-decade highs set in March 2020.
"The DXY is reaching higher than my base case, due to policymaker decisions outside of my base case," Economist Lyn Alden wrote in a Twitter thread about the phenomenon.
"Therefore, we need to be aware of the market issues that occur when this happens. It's no milkshake (eg US increases rates and gets equity buy-in) but rather, all assets suffer."
U.S. dollar currency index (DXY) 1-week candle chart. Source: TradingView
TradFi and crypto feel the fear
Nerves among crypto and traditional traders alike were thus plain to see, reflected in plummeting market sentiment.
Related: Bitcoin repeats rare weekly chart signal that resulted in 50% BTC price dips
The Crypto Fear & Greed Index reached its lowest level since April 12, which at 21/100 represented "extreme fear" as the guiding market mood.
Crypto Fear & Greed Index (screenshot). Source: Alternative.me
Its traditional market counterpart, the Fear & Greed Index, until recently lagging crypto in "neutral" territory, also fell into line, recording 27/100 or "fear" on Wednesday.
Fear & Greed Index (screenshot). Source: CNN
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Title: Bitcoin rebounds off 6-week lows amid warning of 'brutal' BTC price bull trap
Sourced From: cointelegraph.com/news/bitcoin-rebounds-off-6-week-lows-amid-warning-of-brutal-btc-price-bull-trap
Published Date: Wed, 27 Apr 2022 09:36:02 +0100