Bitcoin Price Analysis

Why did the price of bitcoin fall below $ 50,000; The fall of global stock markets coincides with the jump of the global dollar index


Yesterday we saw the price of Bitcoin fall below $ 49,000. At the same time, as the dollar index reached its highest level since November 2020, global markets fell.

to the the report Coin Telegraph, rising bond yields have put the bitcoin market and net asset value under downward pressure; This eventually led to lower prices in the digital currency market.

Dollar Index and Bitcoin Price
Dollar Index and Bitcoin Price

Rising bond yields, a threat to bitcoin?

Bitcoin and stock markets were hit hard by rising Treasury bond yields over the past 10 years. As a result, the macroeconomic outlook for the global economy has deteriorated.

Kyle Davies, CEO of Three Arrows Capital, said:

I do not care about the interest rate approach, if the interest rate stays the same, we will all retire and if it increases, we will have to go back to school.

According to Bloomberg data, US stock markets, especially the S & P500 index, have shrunk to the size of all earnings in 2021.

If stock markets continue to stabilize or correct prices, we are likely to see negative effects on bitcoin prices in the short term.

Digital currency trader Scott Melker says Bitcoin is more likely to enter a phase of crossover fluctuations. At the moment, there is both high sales pressure in the market and high demand from buyers, and these issues have led to Bitcoin being in a narrow channel. He continued:

We are likely to enter a period of transverse fluctuations. We have a lot of selling pressure at the top and a lot of buying pressure at the bottom. It is gratifying to see a turning point in supply and demand.

Bitcoin price analysis

In the foreseeable future, if bond yields do not decline, the threat of bitcoin price declines will remain short-lived.

Is the price trend down?

High Stakes Capital, a well-known FTX trader, believes the market is bullish. He goes on to say that despite the seemingly declining market outlook, traders are accumulating on the Coinbase Pro platform.

Over the past week, capital outflows from Coin Base Pro have increased. This can be considered a sign of the accumulation of bitcoins by institutional traders. “Sticks Capital said:

I saw in a forum that people think I’m thinking down. However, in my last tweet, I only mentioned the scenarios ahead. There is a big risk, and if stock markets improve, bitcoin will follow suit. Coin Base Pro investors are still accumulating at this level. My view is very upward.

Unlike stock markets, Bitcoin has seen a 100 percent leap so far in 2021. Despite the stagnant structure of the market, various indicators within the chain indicate that Bitcoin is ready to jump.

Bitcoin price chart and S & P500 index
Bitcoin price chart and S & P500 index

If institutional investors, especially American investors, accumulate bitcoins, they are less likely to fall into significant protections such as $ 30,000 and $ 40,000.

The point of difference between the current ascending cycle and the previous cycles can be considered the absence of 30 and 40% corrections. In the short term, the $ 52,000 resistance will be one of the major resistances to the Bitcoin price. If this resistance is broken, we can expect another big leap in the digital currency market.

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