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USD has “more room to fall” – 5 things to look at in bitcoin this week

Bitcoin (BTC) is heading for a bullish start to trading in another week, after shrinking to lower levels and reaching $ 11,700.

Cointelegraph is looking at five things that could shape prices in the coming days, after BTC / USD saw little impact from both the Fed and futures settlements last week.

Stocks placed in higher peaks

In a classic sequel to the sinister post-coronavirus, stock markets are heading even higher on Monday.

Despite the difficulties that many face after months of sporadic coronavirus blockades and the associated economic hardship, the world’s large cap stocks show no signs of tagging.

The Dow Jones made rapid progress before moving slightly lower towards the end of trading, to 0.5% per day. In the United States, S&P 500 futures were also modest at 0.3% of print time.

Progress is coming as geopolitical tensions escalate as the United States and China are born over issues such as Washington̵

7;s planned forced sale of the social media platform TikTok.

Speaking to Bloomberg, however, an analyst sounded more like a bitcoin bull when describing stock prospects.

“I can’t figure out what will change people’s outlook on why we should stop buying,” said Randy Frederick, vice president of trade and derivatives at US multinational financial services giant Charles Schwab.

“If we keep buying and have a few more downloads, which I think is likely, people will just keep going up and buying those downs.”

Bitcoin vs. S&P 500 3-month chart

Bitcoin vs. S&P 500 3-month chart. Source: Skew

The dollar index rebounds after a new decline

After most macro assets reported losses on the back of the Fed’s speech on Thursday, Bitcoin still managed to make a noticeable turnaround. After the speech, BTC / USD grew by more than 4.2%.

The same goes for the safe haven gold, which also recovered over the weekend. Interestingly, the dollar index, or DXY, which fell two years after the low, also bounced back – analysts continue to see feedback between the two assets.

At the time of publication, Bitcoin was circulating $ 11,600, reaching $ 11,720 early in the morning. Despite the broad push ahead after the Fed, the consensus among Bitcoin commentators remains that long-term policy will stimulate interest in hedging against the dollar.

“Powell’s speech is about both employment and inflation. The Fed wants full and healthy employment and is expanding the way they look, ”tweeted Galaxy Digital CEO Mike Novogratz.

“Inflation will be tolerated in order to reach these goals. Bull for gold. Bulls for BTC. “

If DXY actions continue to continue their feedback with Bitcoin, the largest cryptocurrency may receive an additional boost sooner rather than later.

“The dollar has far more room to fall than almost anyone thinks,” said Peter Schiff, referring to another Bloomberg piece in which investment firm Pimco warned that the dollar was just beginning to fall.

US $ 1 currency index

US $ 1 currency index. Source: TradingView

The difference in futures is still untested

Back in bitcoin and the return of CME Group Bitcoin futures gaps traders on Monday.

Modest in size, the gap between the end of last week with futures trades and the beginning of this week is between 11,645 and 11,735 dollars.

However, this will arouse little interest, as the more significant interaction with a lower difference remains more of a topic of interest. Placed at around $ 9,700, bets remain that this price will form a short-term target price for BTC / USD.

According to Cointelegraph, futures “gaps” have historically functioned as reliable indicators of market direction, but the time required to “fill them in” can vary considerably.

The CME Bitcoin futures chart shows a difference between $ 9,700

The CME Bitcoin futures chart shows the difference between $ 9,700. Source: TradingView

The hash ratio is moving towards ever higher highs

The speed of the bitcoin hash started a new return after a slight correction this month – the data show averages for seven days ago over 125 depletions per second (EH / s).

The hash rate is the computing power dedicated to the validation of a bitcoin blockchain by miners. The metric is impossible to measure accurately, but the hash rate numbers allow a rough idea of ​​the miner’s mood.

125 EH / s are not far from the highest values ​​of hash frequency observed earlier in August, and combined with continuous highs for network difficulties, it is clear that the miners are bullish.

7-day average bitcoin hash value 1-month chart

Bitcoin 7-day average hashrate 1-month chart. Source: Blockchain

PlanB, the creator of Bitcoin stock price forecasting models, agreed last week as the difficulty reached its highest level ever at 17.6 trillion.

In response, Saifedean Ammous, author of The Bitcoin Standard, argued that even the ugly events that destroy hardware would not cause headaches to market participants more widely.

“I think destroying miners would make digging more profitable for other miners,” he wrote in comments on Twitter.

“It would only affect the price insofar as it forces miners to sell more than they could otherwise, which I don’t think has a very strong effect.”

The inventors remain greedy

As bitcoin approaches $ 12,000, investor sentiment may still see a return to “extreme greed,” which in itself warns that a sale is imminent.

The index of crypto fear and greed, which caused its highest reading this month, still remains in the upper quadrant of its scale – 75/100 on Monday.

Crypto Fear & Greed Index 3-month chart

Crypto Fear & Greed Index 3-month chart. Source: Alternative.me

When BTC / USD reached $ 12,500, an 84/100 reading appeared, which according to the creators of the index means that a correction is likely.

The index is not outside the zone of “greed” since the end of July.

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