The US Federal Reserve Bank is often regarded as the most powerful central bank in the world. The Fed has the power to drive the dollar higher or lower, and even affect the price of gold and other precious metals. This is why many believe that a slip in the US dollar will spark a run on gold and give Bitcoin an opportunity to rise. With speculation of the US increasing interest rates in the beginning of 2018, some investors are starting to think that the Fed will not be as careful about not raising rates too quickly, and as a result, the US dollar may fall against the Euro, pound, and gold.
Since the December 2017 agreement between the globalist Fed and the crypto-backed alt-coin markets, Bitcoin’s price has been on a tear, surging as high as $17,000 per coin. But, the crypto markets have been rattled by bad news as far-left Fed officials reportedly criticized crypto-backed alt-coins for offering a haven from the US government’s regulatory crackdown on banks.Bitcoin (BTC) and the broader financial markets faced a significant drop on the 18th. In June, there was a new wave of selling after James Bullard, chairman of the Federal Reserve of St. Louis, said he expects a first interest rate hike by the end of 2022. Bullard’s comments were even more hawkish than those of Fed Chairman Jerome Powell on Wednesday, who suggested a rate hike would come in 2023. Powell’s comments led to a sell-off in financial markets as the US dollar strengthened. US Dollar Currency Index. 4-hour chart. Source: TradingView Data from Cointelegraph Markets Pro and TradingView show that as the dollar strengthened, sellers suppressed bitcoin’s bullishness, resulting in a drop to a daily low of $35,129. 4 hour chart BTC/USDT. Source: TradingView The uniform sell-off in various assets, including equities, gold and cryptocurrencies, has further shaken the notion that bitcoin is an uncorrelated asset, as data shows that BTC’s correlation with gold and equities has continued to rise in 2021.
Traditional markets end the week lower
Friday’s close in traditional markets marked one of the worst weeks for the Dow since October, with the index losing five consecutive sessions, bringing the overall decline for the week to 3%. The S&P 500 and NASDAQ were also hit hard on Friday, closing the day down 1.31% and 0.92%, respectively, while the 10-year Treasury Note fell 4.04% in response to the strengthening dollar. Bullard pointed to higher-than-expected inflation as the reason for the Fed’s recent hawkish stance as the economy rebounds from the Covid 19 freeze. Bullard said: We are looking forward to a good year, a good opening. But this year is bigger than we expected, inflation is bigger than we expected. I think it is only natural that we have started to take a more hawkish stance in order to curb inflationary pressures. Bullard suggested that future inflation will be 3% this year and 2.5% in 2022, before returning to the Fed’s 2% target.
Altcoin price collapses
On Friday, the price of altcoins fell along with that of bitcoin, as traders rushed to the stable, safe coins amid rising market volatility. Daily indicators for the crypto-currency market. Source: Coin360 Ether (ETH) is down more than 13% to a low of $2,137, while Amp (AMP) is down 33% from its all-time high of $0.1211 on the 16th. June has fallen. Related: Bulls hesitate to buy the deal after the price of bitcoin fell to nearly $35K. Among the top 200 coins, the top two performers of the day were ZKSwap (ZKS) and Gnosis (GNO), up 14% and 7.4%. The total cryptocurrency market is now $1.486 trillion and bitcoin’s share is 44.8%. The views and opinions expressed herein are those of the author and do not necessarily reflect those of Cointelegraph.com. Every investment and every transaction involves risk. So you need to do your own research before making a decision.
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