Bitcoin bulls miss key resistance flip as BTC price sheds 8%

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Bitcoin (BTC) extended losses on the July 21 Wall Street open after a key resistance level failed to hold as new support.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

Dollar rises to squeeze risk assets

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD dropping to $22,340 on Bitstamp after the opening bell, down 8% from its local top. 

The pair’s progress had seen a challenge from Tesla, which revealed that it had sold 75% of its BTC position at a loss. Macro events then added to Bitcoin’s woes in the form of fresh U.S. dollar strength and a surprise rate hike from the European Central Bank (ECB) to combat inflation.

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U.S. dollar index (DXY) 1-hour candle chart. Source: TradingView

At the time of writing, the U.S. dollar index (DXY) had regained 107, up 0.6% in an hour as U.S. equities conversely saw modest losses. 

In Europe, meanwhile, the ECB decision failed to improve the fortunes of the euro, which gave back early gains as the Eurozone battled fresh political fallout in Italy.

“Curious to see if we get a similar breakdown on equities that like we did before,” popular trader Josh Rager tweeted, eyeing an S&P 500 fractal from late May.

“Naturally, this would impact the price action of $BTC and crypto.”

The macro impact had already cost Bitcoin its 200-week and 50-day moving averages at the time of writing, these both lingering at $22,800.

“Unfortunately for bulls, BTC lost the 50-Day MA and the key 200-Week MA,” on-chain analytics resource Material Indicators wrote in part of its latest update, adding the nearest macro support level was now just below $20,000. 

For popular trader and analyst Crypto Tony, $21,700 was now the level to preserve.

Comparing 2022 to previous bear markets, meanwhile, he argued that Bitcoin should still be in line for some upside before another downmove — a perspective echoed elsewhere this week.

Altcoins echo loss of momentum

On altcoins, volatility was commonplace as large-cap tokens faced uncertain headwinds.

Related: Price analysis 7/20: BTC, ETH, BNB, XRP, ADA, SOL, DOGE, DOT, MATIC, AVAX

Ether (ETH), previously the best performer in the top ten cryptocurrencies by market cap, fell up to 9.7% overnight.

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ETH/USD 1-hour candle chart (Binance). Source: TradingView

At the time of writing, ETH/USD circled the $1,500 mark, while Cardano (ADA) and Solana (SOL) also lost around 10% in 24 hours.

Commenting on the outlook, however, Jonah Van Bourg, head of trading at crypto liquidity provider Cumberland, pointed to Ethereum’s Proof-of-Stake transition as one factor to remain bullish on the largest altcoin.

“While the price action of the recent past has been technical and highly macro-correlated, this move has been crypto-fundamental: the Sepolia testnet successfully merged to proof-of-stake on July 6th, setting the stage for an early-autumn mainnet merge,” one of a series of tweets published on the day read.

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