Cryptocurrency prices are declining as Bitcoin (BTC), Ethereum (ETH), and Binance Coin (BNB) trade in the red. Taking into account macroeconomic factors, cryptocurrencies with the biggest market caps may suffer further losses.
After experiencing rejection at $1.2 trillion, the crypto market cap currently stands at $1.09 trillion. Only Ethereum has been able to preserve some of its last week’s gains, as it lost 2.2% against Bitcoin, and Binance Coin lost 7% against Ethereum.
The uptrend in U.S. dollars is negatively impacting the crypto market, according to analyst Justin Bennett. It seems that the currency is attempting to reclaim 2022 levels on higher timeframes after seeing a major uptrend at the beginning of 2022.
Consequently, risk-on assets, such as equities and cryptocurrencies, could lose more value; inflation trending up in the next few decades; and the global financial market could experience less liquidity.
The chart below was shared by Bennett as follows:
As long as the US dollar is doing this, expect stocks and crypto to struggle. Currently, the $DXY is trading at 107.40. The $DXY is still forecasting 112-113. You should be careful out there (…). You should follow the trend…unless it’s the $DXY. It’s likely that it’ll be 112-113 at first, but it’ll be 120 by the end of the year. Risk assets fall when the USD rises.
Around $17,600 was the yearly low for Bitcoin, the largest crypto by market cap. Jurrien Timmer, Fidelity’s Director of Macro, said this price point will act as critical support for the cryptocurrency, as reported by NewsBTC.
Will Macro Economic Factors Break A Critical Support For Crypto
According to Timmer, Bitcoin’s Supply and Demand models show $17,600, $3,100, and $200 as major support zones despite persistent declines. According to the expert, BTC is likely to see greater appreciation in the long run, a bullish trend that will surely push the entire cryptocurrency market upward:
A valuation multiple can be calculated based on the price-to-network ratio of Bitcoin (my proxy). According to a power regression curve, the network’s growth continues.
BTC’s price and crypto market, on the other hand, are expected to lose more, according to Bennett. In terms of market cap, the first crypto could dip as low as $9,500 or as high as $13,500.
According to experts, the current monetary policy of the U.S. Federal Reserve (FED) supports the bearish thesis. Bennett believes that to achieve its goal, the financial institution will continue to increase interest rates in order to prevent inflation from rising.
Rallies in bear markets can be identified even without a chart. One simple question answers it all.
Do you think the Fed is easing or tightening?
➡️If easing, dips are for buying
➡️If tightening, rallies are short-livedThe fed just began tightening and isn’t likely to stop anytime soon.
— Justin Bennett (@JustinBennettFX) August 17, 2022
Via this site
