Stocks, gold, BTC and crypto falling as US dollar is gathering strength
Apart from other issues associated with crypto that happened after the pumping of most complicated DeFi tokens, there has been the biggest disruption. US dollar is in the centre of the madness and become its main reason. The Wall Street CBOE Market volatility index (VIX) has jumped up to 17% to the highest level of almost two weeks
Fall of the major market indexes
In a result of another landmark sale of several assets in 2020, BTC has decreased to almost $10,300 after losing 8% of its value.
The leading digital asset is now trading at $10,435 — the level seen last week with the ‘real’ trading volumes less than $2 billion.
As the trader Cole Garner notes, ‘25–35% throwbacks are typical for bullish BTC markets. This is just a new opportunity’.
Altcoins obviously followed this tendency falling even lower in tandem with BTC. Among other best cryptos that have suffered there are Polkadot (DOT), BNB, Ether and LINK.
Considering that DeFi tokens have gained most, they are also bearing the brunt of bears` pressure. This month an average DeFi token was half reduced while Tendies appeared to lose most with losses of 25%.
Several tokens led by SAKE (+ 80%) и SASHIMI (+ 42%) are still demonstrating gains.
Motions occur synchronously
Despite the losses, Bitcoin is keeping the key psychological level of $10, 000.
‘Since the middle of 2019, it has been trading around this level with only a few exceptions. The average price over the recent 200 days is now only $9200’, notes analyst Mati Greenspen.
The flagman cryptocurrency which is demonstrating surprising stability is defined by stocks that reach 2-month minimum.
‘All the asset classes have been moving synchronously including stocks, metals, crypto and so on. Fiat-correlations between cryptos are sharply increasing when major sentiments occur and more conscious volatility arises. Incredibly, for crypto traders now, the macro is often more important than the micro,” said trader and economist Alex Kruger.
He expects markets to fall before the election, which means lower risk exposure.
“As for BTC, if it is brought to 9 thousand,” then hell will start in the market, “ he said.
But many expect Bitcoin to separate from the stock market in the coming months if the S&P 500 continues to plummet.
“The progressive halving and reduction in derivatives trading volumes, fundamentally reduce the pressure to sell BTC against the bullish fundamentals of anti-inflationary hedging,” said onchain analyst Willy Wu.
Even gold dropped to $ 1,885 before recovering above $1,900. According to trader Bob Lucas, “ anything worth $ 1,700 just needs to be bought.”
The yuan limits the dollar’s dominance
Analysts say the correlation between the offshore yuan and many G-10 currencies has increased since the start of the pandemic. According to them, the Chinese currency is increasingly affected by weekly changes in the price of the pound and commodity-related currencies such as the Australian, new Zealand and canadian dollars. Even crypto assets are affected.
“It is clear that the yuan is becoming a more important driver of G-10 exchange rate movements than it has been in the past,” although the us dollar is still the dominant currency driving movements, “ analysts said. Investors are betting that China may be the only major economy to show growth in 2020.
The us dollar index (DXY), the main driver of the action, is at its highest level since July — below 94, and closed up 0.35% to 93.988, the Euro fell 0.54%, the pound — 0.66%, and the yen — 0.27%.