Bitcoin, Ethereum shaken by a strong dollar – Nairametrics
On Monday morning in London, the dollar increased in value against major currencies, further putting pressure on the crypto market, ahead of some key central bank decisions throughout the week, including the Federal Reserve Bank.
The U.S Dollar Index, which measures the greenback’s value against a basket of other currencies, gained 0.12 percent to 96.190 points.
A strong resistance level of $50k has prevented Bitcoin from breaking through amid weakened long positions in the bitcoin derivative market, while Ethereum bulls are battling to hold $4K amid cautious sentiment among crypto investors.
In the crypto market, the dynamics are changing after an unlimited supply of fiat currency helped drive prices higher, particularly in bitcoin and ethereum, which are limited in supply.
According to some analysts, institutional investors may not take heavy risks during the last weeks of December for tactical reasons. Due to this, we expect crypto to remain range-bound through December.
Due to concerns about Omicron’s impact on economic recovery, markets have been volatile since it was discovered. Last week, however, investors fled safe-haven assets after reports that the variant may not be as bad as feared.
A number of emerging-market central banks and six G10 central banks will meet throughout the week, starting with the Federal Reserve on Wednesday.
In order to achieve a balance between Omicron-induced uncertainty and increasing inflation, central banks will have to strike a delicate balance
Interest rate hikes may be accelerated, as the Fed accelerates its asset-purchasing program. By May 2022, investors expect an interest rate hike to be more than 50% likely.