Bitcoin Rebounds to $55K Amid Dollar Threats and Inflation Expectations
Although there was a 7% decline in Bitcoin between September 5 and 7, the cryptocurrency was still able to close each day at a price close to $54,000 and eventually regained some of those losses, reaching $55,300. Although the price behavior of Bitcoin paralleled that of the world’s stock markets, there are several reasons that could account for the price increase, such as data on inflation that is expected and mounting threats to the US dollar’s hegemony.
Will Bitcoin Surge with Fed Rate Cuts? Analyst Warns of Unsustainable Momentum
Since September 6, when the S&P 500 index futures fell, investors have gained 1.4% as they became more certain that the US central bank would lower interest rates in the coming months to boost the economy. It has always been difficult to enact a less restrictive monetary policy, but economists are forecasting a decrease in inflation. Since part of the allure of Bitcoin has been its capacity to be hedged due to its set monetary policy, the effect of reduced inflation is neither simple nor totally evident.
The X social network was used by user apsk32 to show how the recent US interest rate decrease cycle, which started in 2019, initially gave Bitcoin bullish momentum, but that momentum eventually proved unsustainable. However, the analyst suggests that the survivors would have a great entry point if there is a pullback to the $45,000 to $55,000 range. As a result, it’s wise to treat any optimistic forecasts for Bitcoin’s price that stem from a drop in interest rates with caution.
How the US Presidential Election Could Shape Bitcoin’s Future Amid Dollar Tariff Proposals?
Investor attention is turning toward the US presidential election in November, regardless of the monetary policies implemented by the US Federal Reserve. Proposals have been made by the Republican Party and former President Donald Trump to impose 100% import tariffs on nations that interact internationally without using the US dollar. According to Bloomberg, Trump reiterated his pledge to maintain the US dollar’s position as the world’s chosen reserve currency on September 7 during a rally in Wisconsin.
While a declining US dollar generally helps the price of Bitcoin, it is not certain that it will outperform more conventional value stores like gold, equities, or real estate. Still, it’s important to see the persistence of Bitcoin’s main derivatives demand statistic as a sign of strength.
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