According to many analysts, if macroeconomic data continues to influence the markets, Bitcoin could enjoy a familiar momentum in the coming weeks and even thereafter. Crypto Ed, the founder of the trading group CryptoTA, pointed out in a post on December 14th that the US dollar has seen its lowest levels in recent months.
US Data and Bitcoin
Bitcoin and the strength of the dollar are known to have an inverse correlation in the past. Although this has decreased recently, changes in US macro policy are thought to support the price of Bitcoin while putting pressure on the dollar going forward. Leading macro data pressures of the week, combined with optimistic signals from the Federal Reserve, draw attention to the possibility of the crypto market rising even further in 2024. This development could happen as decreasing inflation allows the Fed to pivot in its interest rate increases, thereby increasing liquidity in favor of risky assets.
With macro figures showing the impact of monetary tightening on inflation, the rapidly falling dollar this week is not yet ready to benefit from this change. The US Dollar Index (DXY) has fallen more than 2% since the beginning of the week and currently stays below its lowest level since mid-August at 102 dollars.
Commenting on the matter, well-known 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 post:
“The Long-Term Outlook for DXY will help the Bitcoin price teleport to new ATH levels.”
Amidst these developments, the BTC/USD pair was trading at the level of 42,321 dollars at the time the article was written, and it was relatively bearish following the short volatility of the previous day. According to data from TradingView, Bitcoin showed a 13% increase in December.
