The US dollar strengthens, US stocks and crypto markets are not favored
According to data from Bank of America, in the past week, the US stock market experienced an outflow of about $35 billion, the highest weekly outflow since December 2022. Additionally, Goldman Sachs' trading division estimates that, given the trends in stocks and bonds, US pension funds will sell $21 billion worth of US stocks and buy an equivalent amount of bonds by the end of December this year.
Last Friday, the yield on the 10-year US Treasury rose nearly 1%, reaching 4.629%, close to a seven-month high, and the US stock market may still face the risk of a frantic sell-off. Wall Street analysts believe that in the absence of major news, data, and light trading, the yield on the 10-year US Treasury, which serves as an anchor for asset pricing, will impact the stock market; the higher the yield, the greater the pressure on the stock market.
As the US dollar strengthens, it suppresses global currencies and assets, including Bitcoin. When the dollar strengthens, dollar-denominated assets become more attractive compared to cryptocurrencies. Investors prefer traditional investments like US Treasuries or stocks, which provide returns in a strong dollar environment. Meanwhile, the decline in liquidity and investors taking profits at year-end further weakens the possibility of sustained rises in cryptocurrencies.
