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What’s Happening with Bitcoin and DXY? What happened in the financial markets yesterday and what developments await us in the future? How will these developments affect Bitcoin?
It’s challenging to predict how deep the downturn in Bitcoin will be, and it’s currently uncertain. Since cryptocurrency markets are highly volatile, prices can change rapidly. However, we can analyze the causes of this decline and the possible points of return. Let’s first look at a few important events that caused the drop today.
Causes of the Decline:
U.S. PPI Data: One of the negative influences on Bitcoin prices was that the U.S. PPI (Producer Price Index) came in above expectations. This may lead investors to shift to more traditional assets when they are apprehensive about inflation.
MPI – Miner Position Index: Mining-related data showed that Bitcoin mining activities are transferring more Bitcoins to exchanges than usual. This indicates that miners are directing their inventory of Bitcoin for sale, increasing sell pressure.
U.S. CPI (Consumer Price Index) Data
- Expectation: 0.3% Previous: 0.3%
Expectation: Analysts expect the CPI, which increased by 0.6% in August, to increase by 0.3% on a monthly basis in September.
Possible impacts:
If the CPI is below expectations, this will indicate that inflation is under control. This may reduce the possibility of increasing interest rates and may lead to depreciation of the dollar. At the same time, this could be a positive development for equities and crypto assets.
If the CPI exceeds expectations, this will raise inflation concerns, which is currently the expectation. This situation can increase the possibility of raising interest rates and cause the dollar to appreciate. This could have a negative impact on equities and crypto assets.
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U.S. Unemployment Claims Data
- Expectation: 210K Previous: 207K
Expectation: Looking at past months, we see that unemployment data came in below expectations and a below-expectation realization in unemployment applications this month may indicate that the unemployment rate is trending down.
Possible impacts:
If unemployment applications are below expectations, this signals that the recovery in the economy is continuing. This will cause the dollar to appreciate.
The crypto market and Bitcoin can react sensitively to changes in the value of the dollar. If the CPI comes out high and unemployment applications come out low, this could cause the dollar to appreciate. The appreciation of the dollar could lead to an increase in caution and selling pressure in the crypto market.
Bitcoin Analysis
From a technical analysis perspective, the situations support the news. If Bitcoin starts to close below the 26,400 level, a move towards the 24,350 levels in Bitcoin could be possible. However, before this, of course, there are significant support levels in Bitcoin and these support levels are determined on the chart. We need to see closes above the 27,200 level for a possible positive scenario in Bitcoin.
Dollar Index DXY
On the Dollar Index side, the long-standing rising trend was broken, and a pullback occurred. Currently, the DXY Index is tracking a horizontal course at the previous resistance level, which is also a Fibonacci 0.786 level and corresponds to the 105.68 dollar band. If tomorrow’s data comes in line with expectations, this will reflect positively on the dollar side, and a pullback to the broken level of the uptrend (106.46 dollars) may occur.
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