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Gold and Bitcoin Drops in Tandem, Altcoins Suffer as the Dollar Strengthens

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The cryptocurrency market saw red across the board last night and gold dropped below $2,000 once again as the US dollar bounced back from its two-year low.

The Dollar Index (DXY) has seen a sign of reversal as it briefly touched 92 points, a level not seen since April 2018, then bounced back slightly to 93 points. The hedge against the dollar like gold and Bitcoin dropped in response, showing capital fleeing and potentially returning to the dollar. Even so, when zooming out, the dollar index still remains in a clear downward spiral.

In the short term, if the dollar continues to rise, there would be more pressure on the so-called safe-haven assets like gold and Bitcoin, pushing their prices down further.

According to the Federal Reserve (Fed) report released at the end of July, the Fed still has a gloomy forecast for the US economy. The Committee noted that the future is uncertain and the direction of economic recovery is largely tied to the government’s ability to contain and subside the spread of the coronavirus outbreak. As countries reopen their borders and ease down on nationwide quarantine measures, a sign that the outbreak is showing signs of improvement (or not, in the US’ case), there are still questions as to whether these improvements can be sustained, or if a second or third round of new cases will emerge, sending these countries back into a state of emergency.

The Fed also committed to continuing support in the flow of credit to households and businesses by increasing its holdings of Treasury bonds and mortgage-backed securities to ensure smooth market functioning.

Gold Technical Analysis

Despite recent sell-offs pushing its price down from $2,000/Oz level, the overall uptrend structure is still intact. The 25 days exponential moving average (EMA25) in orange is still able to provide support, and breaking below the line would result in retesting the bottom channel of the uptrend.

Bitcoin Fails $12K

Bitcoin (BTC) prices failed to maintain above the $12K level as $12,300 still proved to be significant resistance. The price is now dipping below EMA9 but the EMA25 should rise and provide some support in the next few days. In the mid-term, Bitcoin is still looking bullish given the price bounces off the EMA25 and breaking below the line could send BTC hurtling downwards to retest the previous high at $10,500 once again.

ChainLink Bull Run Canceled?

While one of the year’s most hyped Altcoins ChainLink (LINK) has seen heavy selling pressure recently, the price has been able to rest on the EMA9 and the EMA25 is also rising to provide another layer of fall protection. 

The pullback for LINK is nothing extraordinary as the token has been on a parabolic bull run since the breakout in early July. The volume is still significantly lower than the previous price’s pivoting points, indicating that the trend is not yet over.

Read more: ChainLink Surges to $20 – Is There Any More Room to Grow?

The SCN30 Index is down 13.39 points this morning from its freshly created all-time-high at 276.10 points. EOS (EOS) and Tron (TRX) are the biggest losers resulting in the Binance Coin (BNB) reclaiming its 8th rank previously losing to EOS.

Disclaimer: This analysis is the view of the author’s alone, and does not in any way represent trading advice. all traders should trade at their own risk.

You may also want to read: Is Bitcoin Nearing Another All-Time High? Why, When and How Much

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