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According to many analysts, if macroeconomic data continues to influence the markets, Bitcoin could enjoy a familiar momentum in the coming weeks and even afterwards. Crypto Ed, the founder of the trading group CryptoTA, drew attention to the US dollar reaching its lowest levels in several months in a post he shared on December 14th via X.
The US Data and Bitcoin
Bitcoin and the strength of the dollar are known to have an inverse correlation in the past. Although this has diminished recently, changes in US macro policy are thought to support the price of Bitcoin but exert downward pressure on the dollar. The leading macro data pressures of the week, combined with optimism signals from the Federal Reserve, have analysts pointing to a further rise in the crypto market in 2024. This development could occur as falling inflation allows the Fed to pivot in its interest rate hikes, increasing liquidity in favor of riskier assets.
With macroeconomic figures demonstrating the effect of monetary tightening on inflation, the dollar has rapidly declined this week and is not ready to benefit from this change. The US Dollar Index (DXY) has fallen more than 2% since the beginning of the week and is currently below $102, its lowest level since mid-August.
Commenting on the subject, the famous analyst Crypto Ed joined those optimistic about Bitcoin while foreseeing more downward pressure on the DXY. Referring to all-time high levels for the BTC/USD pair, he stated in his X post:
“The Long-Term Outlook for DXY will help the Bitcoin price to teleport to new ATH levels.”
The Current State of Bitcoin
Economist Lyn Alden still argued that the conditions created are not yet ideal in terms of supporting a broad change in risk assets. Alden shared his views with his followers on December 14th via X:
“Global liquidity indicators have started to pause a bit after their recent rise, and reverse repos did not unwind in the first half of December, but today’s dovish Fed and the potential decline in DXY potentially started a bit more liquidity.”
With these developments, the BTC/USD pair was trading at $42,321 at the time of writing this article and was trending relatively bearish following the previous day’s short volatility. According to data from TradingView, Bitcoin showed a 13% increase in December.
