Nobody lives in a vacuum cleaner. In the financial and economic world there are many things interconnected, although they may not seem so at first glance. However, this time we will talk about what the Binance researchers have highlighted: the strength of the US dollar will determine where the Bitcoin and cryptocurrency markets are heading.
According to its new trade report, there is a recent negative correlation between the dollar and alternative assets such as cryptocurrencies and gold. The researchers say that last month’s pullback in cryptocurrency markets appeared to have been influenced by pullbacks in global equity markets in the wake of the pandemic. The latter sowed widespread economic uncertainty.
The US dollar and the cryptocurrency market
The US dollar has been a key factor in the success and momentum of Bitcoin this year. However, the recent rally in the dollar has sent cryptocurrencies down. According to Binance, any hint of weakness or a continuation of the incessant selling of the dollar will trigger the next wave of buying alternative assets like Bitcoin.
Likewise, data from Binance Futures suggests that open interest in Bitcoin fell from $ 1.1 billion to $ 650 million in September. Since then, open interest has recovered, increasing to $ 960 million.
Despite the recent market downturn, investors have made decent returns and are not put off by the short-term volatility in the price of Bitcoin. Similarly, BTC’s fundamentals remain strong according to Binance.
After all, no bull market goes up in a straight line. Binance cautions that while it may seem stressful, market corrections occur regularly during bull markets.
Then add that “Market corrections can be healthy”. These serve to adjust overvalued prices and provide buying opportunities. Therefore, many analysts remain optimistic about cryptocurrencies in the medium and long term.
What can we expect?
So what we can expect is for investors to closely monitor macroeconomic trends for clues of Bitcoin’s future direction. Until now, CryptoTendency has sought to maintain support in that regard, providing daily analysis and new information that can help in this task.
Right now, Bitcoin is priced at $ 11,551.98, which translates into an increase of 1.28% compared to yesterday. Since last October 9, it has been increasing consistently, so it remains to wait for development until the presidential elections in the United States.