U.S. dollar strength is waning as traders hope for critical levels to break to exit Bitcoin’s “no trade zone.”
Bitcoin (BTC) showed strength at the June 8 Wall Street open as impatient traders waited for a trend to emerge.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
Bitcoin still in “no trade zone”
Choppy trading conditions prevailed within a familiar range on the day, however, leading to both long and short traders seeing increased risk on low timeframes.
For popular trader Crypto Chase, this was a prime period for the transfer of value to “smart money” — away from small-volume speculators and those with “weak hands.”
A prior Twitter post had argued for a hands-off approach until a decisive level had been breached.
Little interest in $BTC until one of these levels is breached. At that point, we watch for either continuation or price to re-enter range. If re-enter range, I expect the other side to fail and continuation in that direction (as drawn). I tend to lean towards left most drawing. pic.twitter.com/d5JgsAM4LR
Fellow trader Crypto Tony argued that $29,700 needed to hold as support for a further upward momentum to enter.
“Simple playing field for Bitcoin,” Cointelegraph contributor Micha?l van de Poppe added.
Stocks were flat at the time of writing, with 48 hours still to go until the latest United States Consumer Price Index (CPI) readout.
Laying out the possible reactions from BTC/USD, Twitter account PlanC identified between 8% and 8.3% as having a “neutral” effect.
This CPI print on June 10, will be very interesting.
> 8.3%, short-term all markets tank (Bearish)
8% – 8.3%, slight dump or pump (Neutral)
Japanese yen losses contrast with weaker dollar
Elsewhere in macro, the poor performance of the Japanese yen versus the U.S. dollar was again on crypto commentators’ radar.
Even as the U.S. dollar index (DXY) failed to continue its rally above 20-year highs, USD/JPY reached levels not seen since the start of 2002.
U.S. dollar index (DXY) 1-hour candle chart. Source: TradingView
BTC/USD traded in a more modest territory near local highs from before May’s crypto dip, still far from its record peak, as with the dollar seen in November 2021.
BTC/JPY 1-day candle chart (Bitflyer). Source: TradingView
Japan’s central bank continues a policy of quantitative easing, in stark contrast to both the U.S. and European Union, both of which are aiming to reduce their central banks’ balance sheets.
The third largest currency in the world is falling off a cliff vs. the USD.
“Turns out that the monetary experiment in Japan is not going too well,” analyst Jan W?stenfeld responded.
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