Bitcoin (BTC) may continue its “bear market,” one trader says amid hope that a U.S. dollar reversal could soon improve BTC price action.
In his latest YouTube update on May 2, Cointelegraph contributor Michaël van de Poppe argued that USD’s current surge would not last long.
Dollar strength reversal “close”
Bitcoin is still under pressure as stocks and crypto alike face the reality of a major policy flip from the U.S. Federal Reserve.
Due to be announced this week, the Fed is tipped to end the “free money” era since the March 2020 COVID crash once and for all — and risk assets should be first to suffer.
The COVID crash saw the previous peak in the U.S. dollar index (DXY), which then declined as Bitcoin led crypto markets to new highs.
That inverse correlation since turned around once more, and now, with DXY at twenty-year highs, crypto is on the receiving end of pain.
Van de Poppe notes, however, that compared to previous DXY bull runs, Bitcoin has lost considerably less in USD terms. 2014, for example, saw BTC/USD shed over 80%, while the drawdown from its all-time highs in November 2022 has so far only totaled a maximum of 55%.
BTC/USD vs. U.S. dollar index (DXY) chart. Source: TradingView
“Right now, we’re seeing this implied strength, and I think that the dollar is getting into a period where we’re getting done of that move,” he commented, adding that a reversal was “close.”
Nonetheless, Van de Poppe said, the “Bitcoin bear market might continue,” and if so, targets for the downside now extend beyond $30,000 to $25,000.
“Massive speculative excesses”
On the long-term view, popular analysts continued to favor Bitcoin’s enduring strength following a period of upcoming pain.
Related: Fed ‘will determine the fate of the market’ — 5 things to know in Bitcoin this week
Speaking to Wall of All Streets Podcast host Scott Melker on May 2, Mike McGlone, chief commodities strategist at Bloomberg Intelligence, said that a reset of crypto and traditional markets alike was “already happening.”
“This is an ebbing tide of massive speculative excesses in all markets; cryptos were just a…