One of the worst attitudes on the part of those who want to do fundamental analysis on Bitcoin And crypto is to completely ignore what is happening on the market Forex. And it is something that we will try to analyze here, in this in-depth analysis on Sunday, also to understand what kind of impact this could have on the markets that we follow more closely on Cryptocurrency.it.
It’s US dollar season: while everyone expected a subdued 2024 for the most important currency on the planet, less than encouraging data on inflation was enough to reverse the situation. A situation that will be the basis on which to start thinking at least in terms of fundamentals for Bitcoin. And also for the rest of the crypto world.
An analysis that we invite you to come and discuss on ours too Official Telegram channel – together with our analysts and our readers.
It’s dollar season, but Bitcoin is holding
It won’t be an analysis like the others we propose here above Cryptocurrency.it. In fact, the US dollar is the object of most of our attention, against which we must and can also compare and contrast the trend of Bitcoin.
The graph we report here is the DXY, the index that sees the dollar compared to a basket that includes the most important currencies on international markets, namely Yen, Euro, British Pound, Canadian Dollar, Swedish Krona and Swiss Franc. It is a very representative index of how important the performances of the US dollar have been since the beginning of the year.
However, it is not just how the graph went that matters. It also matters how we got to this point: during the end of 2023 no one would have ever bet on the US dollar. All analysts and all market operators expected a correction of a dollar that had arrived from an already very strong 2023.
- What has changed in the scenario?
Everything has changed, or almost everything. Europe is back in the wake of 2% in terms of inflation before Washington, just as it had to start taking into account the clear signs of economic slowdown earlier than in the USA.
For the first time the ECB could intervene on rates – cutting them – before waiting for a signal from Washington, which signals how the situations for the two most important currencies in the world are now divergent. And this is an additional source of strength for the US dollar.
The behavior of Bitcoin during the escalation between Israel and Iran it confirmed the problems of a Bitcoin which is still far from being considered an authentic store of value by the markets. Something, in other words, that could actually replace gold in at least some portfolios.
However, she is not the only one anomaly of this new financial and economic era. The yen, driven by internal problems, is showing weakness not seen in 34 years. Yen which is historically regarded as safe harbor in times of international crisis. And which instead now also pays a price to the excessive power of the dollar.
Important signals for Bitcoin, despite everything
Although the situation is extremely different from the great enthusiasm it brought a few weeks ago Bitcoin to surpass its all-time highs, there’s reason why rejoice.
Bitcoin is holding above $60,000, while the financial markets’ appetite for risk is certainly not what it was a few weeks ago. And as tiring as this long wandering in such a narrow price channel is, it is still the sign of a Bitcoin which bores more than surprises. At least until this particular, very particular situation on the international financial markets is resolved.
