Bitcoin (BTC) dipped below $68,000 as the U.S. Dollar Strength Index (DXY) spiked, leaping from 104.25 to over 104.5 in a flash. The DXY Index surge came on lower jobless claims—215,000 for the week ending May 8, better than the predicted 220,000 and last week’s 222,000.
It points to a stronger labor market, giving the dollar a boost.
The US Dollar Might Keep Bitcoin in Check
As the US dollar continues to suck liquidity like a milkshake, inflation in the UK clocked in at 2.3% in April, near the 2% sweet spot, and eurozone inflation dipped to 2.4%.
Translation: The Bank of England and ECB could be gearing up to cut rates as inflation eases.
Equities staging a nice comeback… crypto, not so much yet.. $DXY pic.twitter.com/EjJXZv0PbO
— Don't follow Shardi B if you hate Crypto (@ShardiB2) May 23, 2024
Meanwhile, the U.S. economy is smashing expectations, which could be bad news for investors.
April data shows inflation moving as hoped, giving the Fed reason to hold or hike rates and strengthening the dollar. Meanwhile, jobless claims fell by 8,000 to 215,000 for the week ending May 18, surpassing predictions.
Treasury yields barely budged as investors debated Fed rate cuts. The 10-year yield dipped to 4.43%, while the 2-year inched up to 4.884%.
This is How Bitcoin and Altcoins Break Out For New Highs
As it stands Bitcoin (BTC) is being overshadowed by Ethereum’s expectation for spot ETFs.
This rivalry often involves both assets playing ping-pong to surpass each other in gains. Yet, if Ethereum breaks past $3,800 or $3,900, Bitcoin could rebound as well.
Historically speaking, when Bitcoin or Ethereum go up, all of the altcoin markets follow suit.
Keep an eye on the latest economic stats and central bank signals to handle these volatile markets. The push-pull between old-school finance and crypto will continue to drive the Web3 market.
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
