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Bitcoin slipped 5% below $65,000 Thursday, with the U.S. dollar resurging amid the Swiss central bank’s interest rate cut.
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XRP, FIL and ICP defied the slump, while SOL and AVAX declined.
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Bitcoin completed its correction by rebounding from $60,000 Wednesday and targeting “much higher levels” in the next phase of the uptrend, Swissblock analyst said.
Bitcoin {{BTC}} slid lower Thursday amid a stronger U.S. dollar, giving up some of the advances from Wednesday’s spectacular bounce spurred by a dovish tone from the Federal Reserve.
BTC dropped some 5% to as low as $64,600 by late afternoon UTC hours from above $68,000 at the start of the day. The broad-market CoinDesk 20 Index (CD20) declined 3.5% from its daily high, as altcoins generally outperformed bitcoin during the day.
Payment network Ripple’s native asset {{XRP}}, decentralized data storage platform Filecoin’s crypto {{FIL}} and the Internet Computer’s token {{ICP}} advanced 6%-7% over the past 24 hours.
Native tokens of layer 1 networks Solana {{SOL}}, Avalanche {{AVAX}} and Aptos {{APT}} lost 2%-3% during the same period.
Bitcoin’s weak price action was perhaps due to the resurging U.S. dollar after the Swiss central bank, in a surprise move, cut interest rates by 25 basis points, erasing all of Wednesday’s steep drop when Fed Chair Jerome Powell hit a dovish tone despite higher-than-expected inflation readings.
The U.S. dollar index (DXY), which measures the U.S. dollar’s strength against other major currencies and a stronger dollar usually weighs on asset prices.
The move was perhaps due to market participants expecting that some other key central banks could start lowering interest rates before the Federal Reserve, macro analyst Michael Kao noted on a social media post.
Musings of the Day, 3/21/24:
Despite JPOW’s Rhetorical Pivot, the data in coming weeks/months present a good likelihood that he punts again in June.
Perhaps USD resurgence today following surprise SNB cut is a hint that RoW will still Out-Dove the Fed. pic.twitter.com/uREhsB2jhL
— Michael Kao (@UrbanKaoboy) March 21, 2024
Market analytics firm Swissblock said that bitcoin completed its pullback before Wednesday’s bounce, reaching almost their target price of $58,000-$59,000 when they called for an imminent cool-off phase last week.
“Now much higher levels (are) coming,” Swissblock analyst Henrik Zeberg said in a Thursday market update. He added that altcoins and bitcoin miners will perform “tremendously well” in the next phase of the uptrend.
Crypto trader Jelle noted that the bottom for the correction is in until BTC holds the $65,000 level. He added that it could consolidate for a while in the current price range and needs to break above the $69,000 price level – the market cycle peak in 2021 – to reignite its rally to higher prices.