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Bitcoin (BTC) ran out of steam near $23,000 on June 16 after the biggest United States key rate hike in nearly thirty years.
Available data showed BTC/USD reaching highs of $22,957 on Bitstamp after the Federal Reserve confirmed a 0.75% hike in June — its largest since 1994.
Momentum did not last long, however, and at the time of writing, the pair had shed $2,000 to return to $21,000 at the new Wall Street open.
Popular trader Crypto Tony eyed the U.S. dollar on the back of the Fed decision, with an about turn in USD strength key to a possible Bitcoin bottom.
The U.S. dollar index (DXY), after spiking to twenty-year highs again after the announcement, began retracing through June 16.
“Coming up to a big resistance zone on the dollar, which if we can reject from here and dump. The Bitcoin bottom may be in soon,” he told Twitter followers.
“However i am looking for another tap up before the drop, which coincides with another leg down on $BTC so keep an eye on this.”
Veteran trader Peter Brandt, well known for his Bitcoin bottom calls, meanwhile said that a retest of $20,000 would spark not a genuine recovery but a “relief rally.”
“Basically the bear market is no where close to over for crypto. Was hoping for a nice rally here but the market may need some more time,” commentator Josh Rager added in part of a tweet.
As U.S. equities opened down after rebounding on the Fed news, concerns around other world economies were just as fresh in the minds of many traders.
The European Union was dealing with a blowout in Italian bonds, while in Japan, currency weakness in the yen was becoming increasingly unnerving.
Due to a combination of a strong dollar and ongoing quantitative easing — not tightening — USD/JPY hit its highest since the late 1990s this week.
Both economies’ struggles were covered by Arthur Hayes, former CEO of derivatives platform BitMEX, in blog posts on Bitcoin’s future in recent months.
For Hayes, the macro turmoil which would ultimately cement Bitcoin’s status was already playing out, but pain would precede any form of relief for the largest cryptocurrency and its investors.