Bitcoin Surges And Crashes As Investors Believe Dollar Has Peaked
Last Updated on 28 September 2022 by CryptoTips.eu
Bitcoin topped $20,000 on Tuesday even while European and US stock markets had hit new lows for the year Monday evening. By Tuesday evening, volatile trading was back and Bitcoin dropped down to $18,900 again.
Although the biggest cryptocurrency is still unable to get out of a tight trading range, in which it has been stuck for three months in a row, there are hopeful signs that investors are willing to switch back to Bitcoin as a consensus that the US dollar has peaked seems to grow in the market.
Bitcoin up big on a day when stonks are down.
— The Wolf Of All Streets (@scottmelker) September 27, 2022
In 2022 that’s like seeing a unicorn riding a three legged elephant through the halls of Valhalla from the window of your billion dollar luxury penthouse on Uranus.
Monday evening, the S&P500, the broadest US stock index, closed at it’s lowest level of 2022. Interestingly enough, this was also the moment that Bitcoin started a brief rally, surging some 7% to hit $20k again on Tuesday. Ether also went higher, touching the $1,400 level. By Wednesday morning, all profits had been returned as Bitcoin traded at $18,700 and Ether at $1,280.
The S&P on Tuesday evening finished even lower, for a sixth straight day of declines.
Inversely to dollar
As we’ve said earlier this week, the surging dollar is bad news for Bitcoin. This is because Bitcoin moves inversely to the dollar, so a strong greenback is negative for bitcoin (and tech stocks, who see their products grow in price overseas, or in other words, become too expensive at times).
These things breaking in Forex could potentially create a narrative for Crypto. Crypto is inherently outside of the system and while not immune to this volatility, having no say in financial alchemy of the traditional system is the entire point of Bitcoin and ETH.
— Flood (@ThinkingUSD) September 26, 2022
However, investors now feel that the dollar’s surge has gone on for too long, and could turn quickly. If it does, analysts believe you can expect surging tech stocks and ditto crypto results.
Holy shit the Dollar is on a rip. Look out below. Glad I'm in #Bitcoin.
— SHAman256 (@The_SHAman256) September 26, 2022
Calvin Tse, head of global macro strategy, Americas, at BNP Paribas admitted that the dollar trade’s “positioning is crowded. If we get a catalyst, the dollar can turn, and turn very aggressively.”
Back in mid-July, the dollar retreated 3% in a matter of weeks, sending stocks higher and crypto on a brief run. As the greenback is now trading at record levels, expect any reversal to also have serious repercussions in the markets.
