After reaching an all-time high of more than 108 000 dollars in December 2024, the Bitcoin is currently experiencing downward pressure. Indeed, a combination of macroeconomic factors, volatility and investor caution is weighing on the market. But is this correction a simple slump or a signal of a more profound change? We take stock.
- Bitcoin hit an all-time high followed by downward pressure, fueled by macroeconomic factors and high volatility.
- The unexpected strength of the US dollar defied expectations despite a drop in interest rates, putting further pressure on cryptos.
A rising dollar that defies expectations
The recent strength of the US dollar, as measured by the index DXYsurprised analysts. Despite a 25 basis point interest rate cut by the Federal Reserve, the DXY broke through multi-year resistances. This situation, unusual in a context of rate reduction, reflects complex dynamics such as global liquidity constraints and significant demand for safe haven assets.
As a reminder, the DXYor Dollar Indexis an indicator that measures the value of the US dollar against a basket of six major currencies, such as the euro, yen or pound sterling. In other words, it is a kind of “thermometer” of the strength of the dollar on world markets. When the DXY rises, it means the dollar is strengthening against these other currencies, which can have significant effects on financial markets. For example, a strong dollar makes dollar-denominated assets, like Bitcoin, more expensive for international investors, which can dampen their demand and put downward pressure on prices. This type of indicator is a real compass for understanding macroeconomic dynamics and their impacts on cryptocurrencies.
Joe McCann, CEO of Asymmetric, explains that this combination of macroeconomic signals and volatility (in particular via the index VIX) has increased the likelihood of a short-term correction. However, he remains optimistic about the long term, seeing these declines as opportunities for savvy investors.
For his part, Donald Trump threw his two cents into the economic debate, declaring yesterday that “ inflation and interest rates are too high », thus fueling discussions on the future of American monetary policy.
Growing pressure on cryptos
Besides Bitcoin, other crypto assets like Ethereum et Solana suffer significant losses. These declines are exacerbated by unexpected economic data, such as increased job openings in the United States, which have shaken both the stock and crypto markets.
Arthur Hayes, former CEO of BitMEX, recently predicted a peak in crypto markets in mid-March, followed by a significant correction. He compares this situation to that of Japan, emphasizing that corrections may come sooner than expected.
The path of Bitcoin remains closely linked to the policies of Federal Reservethe strength of the dollar and discussions on the American debt ceiling. This last point could cause spikes in volatility as the US Treasury approaches its debt limit.
According to QCP Capital, a major crypto trading player based in Singapore, “favorable regulatory narrative waves” continue to support the market. However, structural risks persist, making the next few weeks crucial for the crypto market.
While the current corrections in Bitcoin and the crypto market may be worrying, they are also a reminder that market cycles are influenced by complex external factors. Whether this is an opportunity or a threat will depend on investors’ ability to navigate this period of increased volatility.
From a simple reader in 2017 to editor-in-chief since September 2023, I now combine writing with my knowledge through my articles for Le Journal du Coin. My only goal is to inform you about the universe of tomorrow: that of the blockchain, cryptocurrencies, NFTs and the metaverse. Convinced that Bitcoin is a revolution, I intend to participate in the popularization of our ecosystem.
