For the past few days, Bitcoin has managed to stay above $30,000, and the other altcoins have hovered in the same kind of trading range. They are a rather stuck here it seems, with no dramatic movements in sight.
This week Joe Biden will be sworn in as the 46th president of the USA: might this give cryptocurrencies the push owners would like them to have, or might we see some different kind of activity.
One consideration is the strength of the US dollar, which has been increasing over the last few days. As Cointelegraph says: “On Monday, the U.S. dollar currency index (DXY), which measures USD relative to a basket of major trading partner currencies, hit its highest level since Dec. 21.”
One outcome of this trend is that Bitcoin growth has taken a “breather”. Biden’s announcement of a $1.9 trillion support package didn’t affect the DXY either. Indeed, Tyler Winklevoss said it was “another multi trillion dollar advertisement for Bitcoin.” He believes Americans will buy BTC with some of these stimulus checks, a theory that remains to be tested.
Some analysts believe the USD will continue to be relatively weak in the long term,compared with other currencies, and this depends on how many dollars continue to be printed. This printing dollars trend has “shocked many into considering Bitcoin as an alternative store of value,” Cointelegraph points out.
UK fund manager Waverton Asset Management, commented on this aspect of the currency market: “If there’s a lot of potatoes available, it’s going to be cheaper. If there’s a lot of dollars available, it’s going to be weak.”
The stock markets have been rather lacklustre globally as well, and are seen as being ‘indecisive’. It seems it also needs to take a break.
There is good news for altcoin owners though. Cointelegraph Markets analyst Michaël van de Poppe noted that attention was instead beginning to refocus away from Bitcoin towards altcoins. He tweeted, “Most likely going to occur at this point is the following. Relief rallies all across the #altcoin markets. FOMO on altcoins. #Bitcoin corrects one more time -> altcoins making HL and retesting.” Let’s see what happens after the inauguration, which will hopefully be trouble free.