Over the past 24 hours, the dollar index has taken a breather after climbing to its highest level in about 20 years, returning below the 114 mark, giving risky assets a brief chance to rally. At one point, Bitcoin broke through $20,000, hitting its highest level in more than a week. However, as U.S. stocks fell further into a bear market, BTC fell back again, with Bitcoin terminal data showing that the trading price was about $19,016.21 as of press time, a 24-hour decline of about 1%, and Ethereum also fell less than 1%.
The dollar index, which tracks the greenback against a basket of currencies, rose more than 18 percent this year, reaching its highest level since mid-2002. Bitcoin’s movement is generally inversely proportional to the US dollar, so a strong dollar is not good for Bitcoin.
In addition to the deterioration of the macro environment caused by the Fed’s aggressive interest rate hikes, the crypto market has been affected by a series of problems such as project collapse/bankruptcy. Since mid-June, Bitcoin’s trading price has fluctuated between $18,000 and $25,000, leaving investors cautious about what will happen next.
The pound depreciates and Bitcoin benefits
A strong dollar affected more than just BTC, the pound hit $1.03 against the dollar at one point, a record low. This, in turn, has sparked a wave of pound holders buying BTC in order to maintain purchasing power.
According to data provided by James Butterfill, head of research at CoinShares, the volume of the GBP/BTC trading pair on the Bitstamp and Bitfinex platforms typically ranges from around $70 million per day, but soared to $881 million on September 26 – an increase of more than 1,150%.
ByteTree Charlie Morris, Chief Investment Officer of Asset Management, commented: “The dollar is a huge bubble and [Fed] excessive [tightening] is making a huge mistake, and when they reverse, there will be a massive influx of money into Bitcoin and gold. ”
Strong HanD continues to hold
Staunch holders are not intimidated by the market. According to data compiled by FRNT Financial Inc., the percentage of bitcoins that have not moved for more than a year has remained stable at 68 percent, and the metric is currently at its highest level since 2014.
On-chain data suggests that many of those attracted by the price increases in 2020 and 2021 have persevered, continuing to invest a significant portion of their capital in digital assets. So while their portfolios have depreciated, these losses haven’t been realized for not selling, which means that these Strong Hands are optimistic about BTC’s long-term outlook and believe that market fundamentals are relatively healthy.
Strong dollar continues to “suppress”
Vijay Ayyar, vice president of corporate development and international at cryptocurrency exchange Luno, said the Fed’s 0.75 percentage point hike last week marked a “major event” in the crypto market. Ayyar said: “This is broadly in line with market expectations, so we’ve seen a lot of this sentiment being digested.”
Interestingly, despite the fall in the U.S. stock market and the S&P 500 closing at its lowest level in 2022, Bitcoin began to rally on Monday, so there are signs that the correlation between cryptocurrencies and stocks may be weakening.
However, it may be too early to conclude that cryptocurrencies have decoupled from traditional markets.
Crypto Tony, an independent market analyst and Twitter user, warned in a tweet that “the dollar has not fully peaked.” “The dollar has not fully peaked yet, so we are looking for more evidence of the dollar surging and BTC falling,” he said. If you plan to leverage Bitcoin, keep an eye out for these two factors.”
Tom DeMark, the creator of the stock market inflection point indicator and a well-known technical analyst, said in his report that he has become more pessimistic about the short-term trend of BTC/USD than in July. “Time series indicators show that Bitcoin has not made any progress since the June low, its downward price forecast from its brief August high has been corrected, and the downside space is now $14,877,” the analyst said.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/bitcoin-briefly-rushed-up-20000-to-fall-back-the-strong-dollar-continues-to-suppress-the-crypto-market/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.