Bitcoin Price Eyes $22K As US PMI Data Hits Lowest Since May 2020

Bitcoin (BTC) headed for multi-day highs after the Aug. 23 Wall Street open as United States economic data tripped up the dollar.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

Dollar suffers as data shows incomes “squeezed”

Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it eyed $21,700 at the time of writing, near resistance in place since last week’s near-12% drop.

The pair gained momentum as the U.S. Purchasing Managers Index (PMI) prints for August showed a drop versus the month prior, hitting the lowest levels since May 2020 at the height of the first round of COVID-19 lockdowns.

“The S&P Global Flash US Services Business Activity Index posted at 44.1 in August, down from 47.3 in July, to indicate a further reduction in overall services activity,” a press release from curator S&P Global stated.

“The decrease in business activity was sharp overall and the fastest since May 2020. Service providers noted that hikes in interest rates and inflation dampened customer spending as disposable incomes were squeezed.”

Yikes! The US Composite #PMI just fell to 45.0! That is near #recession levels. The Services PMI is down to 44.1, where an increase to 49.8 was expected. pic.twitter.com/GwSKfnOXS3

— jeroen blokland (@jsblokland) August 23, 2022

The implied slowdown in demand caused an immediate knock-on effect for dollar strength, with the U.S. dollar index (DXY) falling from new twenty-year highs.

*U.S. dollar index (DXY) 1-hour candle chart. Source: TradingView*

The inversely-correlated DXY had conversely gained rapidly in the days prior, this coinciding with U.S. stocks facing resistance and Bitcoin seeing multiple trips below $21,000.

“The Aug. PMI Composite Index fell to 45 from 47.7 in July. It was expected to rise to 49.2,” gold proponent Peter Schiff reacted.

“The Services PMI tanked to 44.1, the lowest since May 2020 and Mfg. sank to 51.3, the lowest since July 2020. The U.S. PMI is weaker than any PMI in Europe or Asia.”