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BitcoinSistemi 2024-11-29 17:14:08

Experts Warned: “Bitcoin is Very Close to $100,000, But…”

As Bitcoin approaches the long-awaited $100,000 milestone, analysts warn that macroeconomic hurdles, particularly a strengthening U.S. dollar, could hinder further price gains. “A stronger dollar could limit Bitcoin’s upside, as historical performance suggests that Bitcoin tends to underperform during periods of dollar strength,” André Dragosch, Head of European Research at Bitwise, said in an interview. “Furthermore, stronger dollars usually signal tighter global liquidity, which could be a drag on Bitcoin in the near term.” The U.S. Dollar Index (DXY), which measures the dollar against a basket of major currencies, has risen from 103.42 to 105.93 since the U.S. election earlier this month, according to TradingView data. Dragosch noted that Bitwise’s quantitative models now identify the dollar as the most important macroeconomic factor affecting Bitcoin’s performance, outpacing monetary policy and global growth expectations. The US Federal Reserve’s monetary policy also played a role in the dollar’s strength. While investors initially expected aggressive rate cuts in 2024, those expectations have since faded. The CME FedWatch tool shows a 66% chance of a 25 basis point rate cut at the Federal Open Market Committee (FOMC) meeting on December 18, while it shows a 34% chance of rates remaining steady. Related News: Speculation Grows: Will There Be Dogecoin (DOGE) Spot ETF Approval in 2025? Tighter monetary policy supports the dollar, creating less favorable conditions for riskier assets like Bitcoin that thrive amid looser financial conditions. Beyond the U.S., global developments could also weigh on Bitcoin. Rising expectations that the Bank of Japan (BOJ) will raise interest rates at its next policy meeting have seen the yen strengthen against the dollar. That shift could lead to the unraveling of the yen carry trade, a strategy in which investors borrow yen at low interest rates to invest in higher-yielding assets elsewhere. A similar shift in August triggered a liquidation event in riskier assets including Bitcoin as investors began exiting yen carry trades. A potential rate hike by the BOJ could reignite similar pressures. Consumer price data from Tokyo on Friday showed inflation rising for the first time in three months, raising the possibility that the BOJ will raise borrowing costs in December. BOJ Governor Kazuo Ueda recently signaled a shift toward tighter monetary policy, stressing that Japan’s economy is heading toward sustained, wage-driven inflation. “Bitcoin’s performance is closely tied to liquidity conditions, and as global central banks tighten, the path to $100,000 may not be as smooth as some expect,” Dragosch said. *This is not investment advice. Continue Reading: Experts Warned: “Bitcoin is Very Close to $100,000, But…”

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