Bitcoin’s Price Jeopardized as US Dollar Index Signals Bullish ‘Golden Cross’

Date:

The Dollar Strength Index (DXY) has reached its highest level in nearly 10 months, indicating growing confidence in the US dollar compared to other fiat currencies. This surge in demand for the dollar raises concerns about its potential impact on Bitcoin and cryptocurrencies. However, it should be noted that these concerns are not necessarily interconnected. The DXY has confirmed a golden cross pattern, which signals a precursor to a bull market according to technical analysts.

Despite concerns about inflation and economic growth in the US, the dollar continues to exhibit strength. Market expectations for US gross domestic product growth in 2024 are lower than the average rate of the preceding four years. Factors such as tighter monetary policy, rising interest rates, and diminishing fiscal stimulus contribute to this slowdown. However, an increase in the DXY does not always reflect confidence in the economic policies of the US Federal Reserve. For example, if investors choose to sell US Treasurys and hold onto cash, it suggests a looming recession or a significant uptick in inflation.

Investors are avoiding government bonds and holding onto cash, waiting for a more favorable entry point. They anticipate that the US Federal Reserve will continue raising interest rates, allowing them to capture higher yields in the future. While a stronger DXY and reduced demand for Bitcoin may not be directly linked, investors recognize the need for alternative assets to protect against stagflation. Therefore, the DXY golden cross may not necessarily have a negative impact on Bitcoin, particularly in the long run.

Source link

More like this
Related

Uber Introduces New Job Options Amid Growth of Autonomous Vehicles

A month following the announcement of a partnership between...

Trump Entertains Supporters with Music After Town Hall Ends Early for Emergencies

Former President Donald Trump concluded a town hall event...

SpaceX’s Rocket Catch Advances Interplanetary Travel Prospects

SpaceX has achieved a significant milestone in the testing...

Trump’s Crypto Coin Available Ahead of Election Day

With shares of his burgeoning social media enterprise experiencing...