Bitcoin, Ethereum, Dogecoin Regain Key Levels — But A Stronger Dollar Is Taking The Wind Out Of Crypto Sails

Bitcoin and Ethereum were trading in the green at press time as the global cryptocurrency market cap rose 2.9% to $1.9 trillion on Monday evening.

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Why It Matters: Bitcoin and Ethereum trading volumes rose on Monday. The 24-hour trading of both coins shot up by nearly 75% to $33.89 billion and $18.76 billion, respectively, according to CoinMarketCap data.

Among other risk assets, the S&P 500 and Nasdaq futures rose 0.5% and 0.7%, respectively, at press time as the market gears up for a busy earnings week.

The dollar exhibited strength against both the yen and the euro. The dollar index, a measure of the greenback’s strength against six other currencies, rose to a two-year high of 100.86, according to a Reuters report.

The strength of the dollar is a headwind against the cryptocurrency market, according to Delphi Digital.

“As BTC struggles to keep its head above $40K, the US Dollar Index (DXY) just broke 100 for the first time in almost two years,” said the independent research firm. 

“The greenback is now on the verge of a multi-decade breakout as two of its major currency pairs (EUR and JPY) are both vulnerable to technical breakdowns of their own. The EUR and JPY make up ~70% of the DXY Index.”

DXY Monthly Candles Vs. 14-Monthly Relative Strength Index (RSI) — Via Glassnode

Another factor working against the apex coin is liquidity, according to Delphi Digital. Pointing to the difference between the expected price of a trade and the price at which it is executed, or slippage, Delphi Digital said over the last weeks it has observed the average size of a BTC order incurring 10 bps of slippage.

“This could be a warning sign for spot market liquidity should this trend persist,” said Delphi Digital.

Average Historical BTC Size For 10 bps Slippage — Courtesy Glassnode

Market intelligence platform, Santiment, said that Bitcoin’s MVRV (Market Value to Realized Value) indicates that prices are in the semi-bullish territory.

Santiment said in a tweet, “Average traders who have invested in $BTC are currently down -10.4%. This metric fluctuates at 0%, so there is less risk in buying while traders are well in the red here.”

#Bitcoin's 30-day MVRV indicates that prices are still in a semi-#bullish area. Average traders who have invested in $BTC are currently down -10.4%. This metric fluctuates at 0%, so there is less risk in buying while traders are well in the red here. https://t.co/MpDUaOCT8q pic.twitter.com/j4eFo7Vcon

— Santiment (@santimentfeed) April 18, 2022

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