#WRITE2EARN #Bitcoin Price Declines Amidst Strengthening #Dollar and #Halving Anticipation #USdollarVsBitcoin
With the U.S. dollar gaining strength, Bitcoin has seen a decline in its price ahead of the April 20 halving and amidst expectations that the Federal Reserve will pause its rate cuts in May.
Recent reports indicate that the U.S. dollar is experiencing its most robust performance in a five-day period since February 2023. This surge in the dollar's value coincides with Bitcoin's downward trend, attributed to the anticipation of sustained high-interest rates and increased volatility leading up to the halving event.
According to insights from The Kobeissi Letter, markets have shifted from expecting Federal Reserve rate cuts in June to a scenario of prolonged higher interest rates. This adjustment is driving up demand for the dollar, particularly among foreign investors seeking greater returns on investments such as bonds and term deposits.
The Bloomberg Dollar Spot Index (BBDXY) has climbed approximately 2% over the past five trading days, reflecting a notable strengthening of the dollar against a basket of 10 major global currencies.
This surge is evidenced by the rise in the U.S. Dollar Index score to 106.34, indicating an increase in value compared to its standing five days earlier.
Conversely, Bitcoin has experienced a 9% price decrease over the same period, currently trading at $63,936 according to CoinMarketCap data. While Bitcoin and the dollar don't always move in tandem, their historical relationship has shown an inverse correlation.
Federal Reserve Chair Jerome Powell's recent remarks on the country's inflation rate, coupled with warnings from traders like Justin Spittler regarding potential corrections in the overbought dollar, add to the complex dynamics influencing both Bitcoin and the dollar.
Despite the impending halving event on April 20, which historically has triggered spikes in Bitcoin demand, investors are showing greater confidence in alternative crypto assets compared to previous halvings.
