Despite the upcoming launch of the Ethereum ETF, the entire market has begun to fluctuate and pull back, which is related to the strengthening of a key factor: the US dollar index.
The US dollar index (DXY), an indicator that tracks the performance of the US dollar against major world currencies, has risen 0.7% from a low of 103.18 on July 17 to the current 103.85, ahead of the US personal consumption expenditures (PCE) index.
The PCE data, known as the Federal Reserve’s "preferred" inflation indicator, will be released on July 26, one day later than the second quarter GDP and unemployment data. This may bring positive news to the US dollar index and increase the volatility of Bitcoin and other cryptocurrencies this weekend.
From a technical perspective, the US dollar index is expected to rise by more than 1.8%, completing a classic V-shaped recovery pattern and heading for a high of more than 106 in 2024.
On the other hand, political uncertainty has led to profit-taking by Bitcoin bulls, and Biden’s withdrawal and support for Vice President Kamala Harris for the presidency has brought some volatility to the market.
While Republican presidential candidate Donald Trump has included a pro-Bitcoin stance in his campaign platform, Harris' stance on cryptocurrencies remains unclear.
