The queen of cryptocurrencies fell 5% in one day, as the value of the US dollar against other major currencies has strengthened in recent days.
Bitcoin is going through a period of volatility. After reaching new heights, the queen of cryptocurrencies is trading slightly above $66,000 at 11:00 a.m. this Tuesday, April 2. The asset lost 5% in one day and 7% over a week. Other cryptos are lagging behind, including ether which lost 6% in one day and 9% over a week. For their part, the altcoins Avalanche and Cardano suffered respective losses of 18% and 13% over one week.
Several data from the United States can explain the fall of bitcoin. On the one hand, manufacturing activity in the United States started to rise again in March, boosting the DXY dollar index (which compares the value of a dollar against a basket of foreign currencies including the yen, the pound sterling and the euro) to its highest since mid-November.
“A stronger dollar makes dollar-denominated assets like bitcoin and gold expensive, which could lead to lower demand,” points out Coindesk.
Fed rate cut
Similarly, investors expect the Federal Reserve (Fed) to reverse its forecast of three 25 basis point rate cuts for 2024. “The likelihood that the Fed will make the first rate cut in June is fallen below 50%”, specifies the media. A scenario that could cause the price of bitcoin to spiral.
If bitcoin is going through a period of volatility, the queen of cryptocurrencies has gained more than 63% since the start of the year and 50% in three months, driven by the euphoria of investors with regard to new financial products: Spot bitcoin ETF.
On January 10, the American stock market watchdog (the SEC) has authorized 11 spot bitcoin ETFs, offered in particular by asset managers like Blackrock and Fidelity. An ETF (or Exchange Traded Funds) is an index fund trading on a stock exchange which follows the evolution of a stock index (or one or more financial or physical assets, such as gold) by replicating the increase as well as the drop in the price of this index (or these assets).
Source: https://www.bfmtv.com/crypto/bitcoin/pourquoi-le-bitcoin-traverse-une-periode-de-turbulences_AV-202404020440.html
