Bitcoin: five factors to consider this week

7. September 2020 0 Comments

Beginning of bullish week for Bitcoin (BTC), after the recent contraction that has slipped the price of cryptocurrency $11,600.

Cointelegraph has analyzed five factors that could affect the price performance in the coming days, in the face of the low impact of Fed moves and futures settlements last week.

The stock market is not going to stop

On the wave of the mysterious bullish trend of the post-coronavirus period, the stock market continues to grow. Despite the difficulties that many are facing after the lockdown and several months of economic difficulties, large capitalization equities do not show any signs of collapse.

The Dow Jones ventured into broadly positive territory before a slight decline towards the close of trading, and eventually recorded growth of 0.5%. In the US, the S&P500 futures show an appreciation of 0.3%.

Nevertheless, international geopolitical tensions continue to grow, particularly between the US and China, on various dossiers, including the sale of the TikTok social platform imposed by Washington.

In an interview with Bloomberg, however, an analyst seemed to echo the words of a Bitcoin investor in describing recent stock movements. Randy Frederick, vice president of trading and derivatives at the American financial services multinational Charles Schwab, told the well-known economic newspaper:

„I see no reason to change people’s minds and therefore stop buying. If we continue to buy and there will be some other collapse, which is likely, people will not stop buying these shares“.

The dollar bounces back after a new collapse

After last Thursday’s Fed speech, most macro assets have suffered losses. On the contrary, Bitcoin has had a considerable appreciation, with a growth of 4.2% in the pair with the dollar.

The same goes for the safe-haven asset par excellence, gold, which is recovering over the weekend. Strangely enough, the US dollar index, the DXY, which had plummeted after Thursday at its lowest point in the last two years, also shows a positive increase. Analysts, however, continue to monitor the inverse correlation between the two assets.

At the time of writing, Bitcoin Trader is at about $11,760. Despite the short increase after the Fed’s speech, Bitcoin analysts still seem to be convinced that the long-term policies implemented by the authorities will lead to an increase in interest in solutions that mitigate dollar-related risks.

Mike Novogratz, CEO of Galaxy Digital, has written about this on Twitter:

„Powell’s speech is as much about employment as it is about inflation. The Fed would like full employment and is trying to analyze the problem from multiple points of view.

Inflation will be tolerated to achieve these goals. I’m bullish on gold and BTC.“

Should the inverse correlation between DXY and Bitcoin continue, a further increase in the value of the cryptocurrency is likely in the near future.

Peter Schiff, a well-known supporter of gold, commented:

„The dollar could collapse well beyond most people’s expectations“.

This statement by Schiff commented on a Bloomberg article in which the investment company Pimco also predicted a further loss in value of the dollar.