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Bitcoin: Increasing Value of US Dollar May 'Worry' BTC Investors
The Dollar Strength Index (DXY) is at its highest in 10 months, signaling an increase in confidence compared to other fiat currencies. However, investors are concerned that the increasing demand for the dollar might have a negative impact on Bitcoin (BTC). Historically, the DXY and the price of BTC have moved in opposite directions.
The DXY also formed a golden cross, with the 50-day MA (moving average) going over the 200-day MA. A golden cross is usually seen as a bullish trend and is often a precursor to a bull market. Furthermore, the US dollar is showing strength amid concerns of recession and inflation still being above the Fed’s 2% target.
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However, a growing DXY is not always a sign of increased confidence. It is possible that investors are selling treasuries and holding onto cash. This could signal an incoming recession or an increase in inflation. Furthermore, the markets anticipate more interest rate hikes in November. This, however, might not affect Bitcoin (BTC) as much. Recent reports have found that BTC’s correlation to interest rate hikes has fallen over time.
Bitcoin spot volume trades continue to fallSource: Forkast News
According to a report by CryptoQuant, BTC spot trading volume has fallen to a six-year low. The report stated, “People are more interested in holding their coins, believing in their future value than selling at the first sign of profit.”
Last week, there were around 8,000 to 15,000 daily transactions. This is a significant drop from March 2023, when daily transactions were over 600,000. One major reason for the development is the growing concern about the macroeconomic scenario. People are HODLing their coins due to the uncertainty surrounding the actions of the Federal Reserve.
Also Read: Bitcoin Recognized as a Digital Currency in Shanghai
Additionally, GlassNode data also shows that the amount of BTC HODLed or lost has reached a 5-year high. As per their data, a total of about 7.8 million BTC currently fall into this category.
📈 #Bitcoin $BTC Amount of HODLed or Lost Coins just reached a 5-year high of 7,891,382.976 BTC— glassnode alerts (@glassnodealerts) September 26, 2023
View metric:https://t.co/dJK8rxBVD3 pic.twitter.com/gwKjdXJ8Qp
Category: Bitcoin News
Post by: TheBitTimes.com