Bitcoin Price Drops $23K on Pelosi Taiwan Visit as Trading Range Continues

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Bitcoin (BTC) saw volatility after Wall Street opened on Aug. 2 amid continued market reactions to tensions between the United States and China.

BTC price reverses as Pelosi lands in Taipei

Data from TBEN Markets Pro and TradingView showed BTC/USD surged above $23,000 on the day as news came in that US House Speaker Nancy Pelosi had landed in Taipei, Taiwan following warnings of retaliation from Beijing.

The visit, which had raised concerns about a major incident, appeared to go off without a hitch – something an analyst at major banking giant JPMorgan had previously said would spark a market rally.

Both the S&P 500 and the Nasdaq Composite Index were slightly higher at the time of writing, reversing the initial losses. Previously, Asian markets had underperformed on uncertainty, with both the Shanghai Composite Index and Hong Kong’s Hang Seng losing about 2.3% on the day.

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While traders saw an end to the calm of recent days on BTC, it remained to be seen whether key trendlines would remain close after see retests at night.

“The coming weeks/months in the Cryptocurrency space will be volatile due to macro events playing a bigger role than ever,” popular trader Crypto Tony prediction.

Crypto Tony added that he would increase his allotment if BTC/USD exited the $22,000-$24,000 range for lower levels.

That reach was shared by fellow trader Credible Crypto, who nonetheless also recognized the potential for a trip to $25,000.

In a potential headwind for Bitcoin and risky assets, the US dollar index (DXY) benefited from daily strength as events unfolded to aim for 106 again.

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The Bloomberg dollar index also gained when Pelosi became the first American speaker in 25 years to visit Taiwan.

US dollar index (DXY) 1-hour candlestick chart. Source: TradingView

Fib Levels Limit Gains and Losses for Bitcoin in Q3

While discussing the broader picture, trading firm QCP Capital confirmed that it did not expect Bitcoin to retest the 2022 lows of $17,600.

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“We expect BTC price to drive upwards for most of the third quarter from here, with upward rallies capped, but also dips on choppy price action,” analysts wrote in their market overview released on Aug. 1.

After that time frame, however, QCP did not rule out a “breaking the lows” move to officially end the current bear market. In “extreme” circumstances, this could be prices as low as $10,000.

An interim pivot, it added, could be a Fibonacci retracement level of $28,700.

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