Over the past week, Bitcoin declined 11.07% to $46,025. Last week, the market saw a flurry of activity on Tuesday, September 7, while on other days, buyers licked their wounds as price action hovered in the range of $44,100-47,400. The BTCUSD pair slid 19% to $42,843. The main reason for the pullback was the flight from risk-sensitive assets, and the triggering of stops (liquidity) as cryptocurrency exchanges crashed.
On Monday, September 13, buyers surrendered all gains earned on Sunday. The DXY index climbed to multi-day highs on the back of Fed tapering expectations. Demand for the US currency increased after remarks from Philadelphia Fed President Patrick Harker. In an interview with the Nikkei, Harker said he favors winding down stimulus as soon as possible.
Then the DXY rally was strengthened by news from Germany. Social Democratic Party candidate Olaf Scholz rejected an offer to form a coalition with the radical left Die Linke in a recent televised debate. The elections are scheduled for September 26.
DXY growth stopped and the decline in Bitcoin also halted. The price is hovering near the lower bound of a sideways channel. In Europe, major pairs are recovering, while S&P 500 index futures and gold are on the rise. Buyers need to regroup, otherwise sellers will smear them across the field down to $40k. Inside the channel, resistance is pegged at $45,735.
High volatility in all markets can be expected on Tuesday at 12:30 GMT after the US CPI report for August comes out. After that, speculators and traders will shift their focus to the FOMC meeting (September 21-22).