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Stocks drift as U.S. dollar gains momentum

Yahoo Finance's Jared Blikre breaks down how markets opened on Friday.

Video Transcript

- Welcome back to Yahoo Finance Live. Some action in the crypto space this morning. Also some downward pressure on stocks overall. Let's get to Jared Blikre on the floor of the New York Stock Exchange. What's standing out to you today, Jared?

JARED BLIKRE: Well, what's standing out to me is it's right after the bell in the morning, and we're talking about crypto, so there must be something going on there. Also got some stuff going on in meme stocks. Let's get to the YFi Interactive, where we have Bitcoin down 8% over the last 24 hours, biggest down day in some time, but I'm gonna switch gears here, not really, but something very related. The US dollar index has been on a tear, and it is heading back upwards, and that is providing some weakness in terms of-- well, let's think about it this way. Our ticker for Bitcoin is BTC-USD. It is the denominator, so when you have the US dollar climbing, because we have higher interest rates, it seems, also have some haven flows, well, that attracts money into the US dollar, but that goes against these other currencies, including cryptocurrencies. It also weighs on multinational earnings, all kinds of other effects.

Let me just show you what's happened with the various US dollar pairs and crosses. This is today, but check out the US dollar versus all of these various countries around the world. We have the Turkish lira. The US dollar is up 35% against that. 32% against the Argentinian dollar. However, we have to take into consideration that it's also up against some of the more developed currencies, so it's up 19% versus the Japanese yen, and that's a very important consideration, because what we don't want to see is a huge move into the yen, because that tends to be associated with capitulation, and we've seen some of that over the last month, but, fortunately, we don't have that as a mainstay in terms of the US dollar versus the Japanese yen.

Now, I want to get back to our main theme here, which is crypto, and just plot some of these movements here. So, yeah, big down day for Bitcoin, and let's get a year-to-day chart, so we can see the highs and lows here. We are just coming off of these highs. $25,000 was a huge level here. Let me bring this down to a two month. We have definitely crossed below this trend line, and we could be heading for these lows right here. $18,000 to $20,000, I would say, is a big target level. If you want to go down below that, I've been saying $13,000 for some time here. I don't necessarily see that in the cards right now. $20,000 is a big level, because that was the high in December of 2018, and if that goes, we could see a further washout. So far, we haven't seen that, but something to keep in mind, guys.

- Breaking trend lines not usually a good sign, indeed. Jared Blikre, thanks so much.