For two consecutive days, cryptocurrency markets saw a drop, with the decline being influenced by the increasing value of the U.S. Dollar Index (DXY). This surge in the DXY was driven by the climbing treasury yields and apprehensions among investors about the Federal Reserve’s strategy for its monetary policy.
Initially, the DXY fell by 0.92% at the start of the week, but this was swiftly countered by a surge in Bitcoin’s value to $102,000. However, the DXY index then took a turn and climbed up to 109.37, a level last seen in November 2022.
The financial markets showed signs of decline in response to an upward spike in U.S. Treasury yields. Specifically, the 10-year bond reached a high of 4.7%, and the yield on the 30-year bond climbed to 4.93%. Although there are various factors contributing to this rise, they generally indicate that investors are worried about persistent inflation due to the anticipated expansion of budget deficits under President-elect Donald Trump’s economic policies.
Essentially, investors are starting to factor in the possibility of an uptick in long-term U.S. government bonds, and the forthcoming Trump administration’s economic strategies may lead to increased inflation, regardless of any growth stimulation they might bring about.
Typically, Bitcoin’s price tends to drop when the U.S. dollar strengthens (DXY). Moreover, there is growing concern among analysts that yield curve controls could re-emerge as a significant topic of discussion.
As a crypto investor, I noticed a dip today when Bitcoin plunged to an intraday minimum of $92,500. Analysts have raised concerns that prices might further drop in the near future should the $90,000 level prove to be insufficient support.
Biyond co-founder Burkan Beyli told CryptoMoon,
“If Bitcoin falls under $94K, then the next target is $81K within the next five weeks. For the downside case to play out, Bitcoin needs to close next week below $95,180. Next week, we have CPI, so bears might show their hand. Overall, I’m bearish on crypto in the short-term (4 to 5 weeks), then very bullish as I expect DXY to correct after Trump takes office.”
According to Jamie Coutts, Real Vision’s chief cryptocurrency analyst, the current strength displayed by the U.S. Dollar Index (DXY) may not hold significant weight compared to the expected increase in liquidity and the pro-cryptocurrency stance of the incoming Trump administration, as suggested by Beyli.
Given the robustness of the U.S. dollar, causing some concerns, I had anticipated Bitcoin prices to reach around $80,000 by now. This underscores the resilience of investor demand and the market’s belief that the Federal Reserve will take action to prevent potential market instability; otherwise, things could begin to unravel.
Despite… refers to a situation or factor that does not change the original statement’s meaning but adds new information or perspective. In this case, it implies that the strength of the U.S. dollar is a given factor, and the focus remains on Bitcoin prices and the Fed’s potential actions.
— Jamie Coutts CMT (@Jamie1Coutts) January 7, 2025
Read More
- HBAR PREDICTION. HBAR cryptocurrency
- IMX PREDICTION. IMX cryptocurrency
- TRB PREDICTION. TRB cryptocurrency
- MNT PREDICTION. MNT cryptocurrency
- XDC PREDICTION. XDC cryptocurrency
- LDO PREDICTION. LDO cryptocurrency
- JTO PREDICTION. JTO cryptocurrency
- FLOKI PREDICTION. FLOKI cryptocurrency
- TNSR PREDICTION. TNSR cryptocurrency
- Dandadan Shares First Look at Season Finale: Watch
2025-01-09 00:43