Feb 04, 2023
U.S. Dollar Rally Derails Bitcoin’s Bull Run
NFT Promotion and Crypto Markets Take a Hit
The crypto markets experienced a downturn on February 3 as Bitcoin (BTC) dropped to $23,329 on Bitstamp. This followed a brief surge that saw the pair reach highs of $24,000 the day prior. The sudden reversal of fortunes was attributed to a rebound in the US Dollar Index (DXY), which saw the US dollar gain strength against other currencies.
The downturn has put a damper on the NFT promotion and crypto markets, which had been riding high on a wave of bullish sentiment. Popular trader Crypto Tony warned that when the DXY dollar finds support and begins to gain momentum, crypto markets tend to experience a pullback. Cointelegraph contributor Michaël van de Poppe echoed this sentiment, noting that a level of 102 for DXY could lead to a drop in risk assets. Matthew Dixon, founder and CEO of crypto rating platform Evai, suggested that there may be a final “blowoff” high before a further drop.
The outlook for the crypto markets may remain uncertain for some time. Trading firm QCP Capital noted that the upcoming US Consumer Price Index (CPI) print, set for release on February 14, could have a major impact on the markets. The firm noted that the Cleveland Fed’s inflation Nowcast is showing a >0.6% print for January, and that similar reweights in Europe have led to a surge in the January CPI. This could lead to downside risks in the near future, either at this meeting or after the next CPI release.
The consensus among analysts remains that the next rate hike in mid-March will be identical to the February one at 25 basis points, according to data from CME Group’s FedWatch Tool.
The NFT promotion and crypto markets have been hit hard by the sudden downturn, but they may yet recover. The key to a successful recovery lies in the upcoming CPI print, as well as the US Dollar Index. Analysts are keeping an eye on both of these indicators to get a better sense of where the markets may be headed. In the meantime, crypto enthusiasts should keep their eyes open for any news that could affect the markets.
Disclaimer: All investment or financial opinions expressed by MoonLanding Media are not recommendations and are intended for entertainment purposes only. Do your own research prior to making any kind of investment. This article has been generated based on trending topics, has not been fact checked and may contain incorrect information. Please verify all information before relying on it.
