Bitcoin price battles $23.5K resistance amid relief over Pelosi Taiwan trip

Market Analysis

Bitcoin (BTC) rose to daily resistance at the Aug. 3 Wall Street open as United States equities gained on relief over Taiwan.

Stocks gain as US dollar coils

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD returning to the area just below $23,500, which had figured as resistance since the start of the month.

The pair had previously held the same zone as support, and was now deciding on whether a new resistance/ support flip was on the cards.

For popular trader Crypto Tony, $23,500 was thus the price to watch to long BTC.

To the downside, fellow trader Pentoshi highlighted the area between $21,800 and $22,000 as the “line in the sand” for BTC.

Stocks performed well on the day, meanwhile, with the S&P 500 and Nasdaq Composite Index gaining 1.2% and 2%, respectively, after the open. News that U.S. house speaker Nancy Pelosi had begun a visit to Taiwan without repercussions from China buoyed the mood.

The U.S. dollar index (DXY), after solid gains of its own at the start of the week, consolidated after facing resistance at 106.8 on hourly timeframes. The intra-day lows matched with highs from May, analysis noted, with the potential for new two-decade highs still in play in what would represent friction for crypto and risk assets.

“As the dollar starts to show potential signs of strength (and yields begin to rip higher), will stocks continue to remain resilient? Price action throughout 2022 tells us ‘no,'” market analyst Caleb Franzen warned.

ARK taps “emerging risk-on environment”

In a summary of the status quo in Bitcoin and Ether (ETH), meanwhile, investment firm ARK Invest painted a mixed picture of where the market could go in 2022.

Related: ARK Invest ‘neutral to positive’ on Bitcoin price as analysts await capitulation

In the latest edition of its research series, “The Bitcoin Monthly,” ARK analysts including CEO, Cathie Wood and others said that “all eyes” were now on macro triggers.

“Given the positive correlation between bitcoin and US equities since COVID, the US being the leading price mover of bitcoin suggests an emerging risk-on market environment,” they wrote.

The United States, ARK added, had likely represented the majority of buy interest in Bitcoin during July’s recovery.

Going forward, however, the odds of an extended rebound were uncertain. Describing its stance as “neutral,” ARK delivered a potential “unlikely” bearish target of just under $14,000.

“Comparable to the selloff at the peak of the COVID crisis, bitcoin’s price did not reach its delta cost basis, a price adjusted cost basis that subtracts the life-to date moving average of market price from its market cost basis and serves as bitcoin’s strongest support level,” the report stated.

“While the likelihood of touching its delta cost basis has diminished, bitcoin’s downside risk in a bear market technically stands at its delta cost basis, currently $13,890.”

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.

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