Advertisement
AD

Main navigation

Get Ready for Bear Market, Glassnode's Analysis Shows

Advertisement
Thu, 4/05/2023 - 13:29
Get Ready for Bear Market, Glassnode's Analysis Shows
Cover image via stock.adobe.com

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of U.Today. The financial and market information provided on U.Today is intended for informational purposes only. U.Today is not liable for any financial losses incurred while trading cryptocurrencies. Conduct your own research by contacting financial experts before making any investment decisions. We believe that all content is accurate as of the date of publication, but certain offers mentioned may no longer be available.

Read U.TODAY on
Google News

A recent analysis by Glassnode suggests that the cryptocurrency market may be bracing for a bear market, as the U.S. Dollar Index (DXY) experiences major fluctuations. The DXY, which measures the value of the U.S. dollar relative to a basket of foreign currencies, has been witnessing significant bullish moves since January 2021. This trend has contributed to a sluggish 2022 for risk assets, including cryptocurrencies.

Advertisement

The decline in the DXY can have a substantial bullish impact on risk assets, with its movements often inversely correlated to the price of digital assets. In September 2022, the DXY initiated another bearish leg after inflation reached its peak. A short-term bounce is expected in early May before the DXY falls sharply from the 105-107 range.

The analyst shared a chart illustrating that the DXY's upward correction is likely to result in a short-term bear market. This development has crucial implications for digital assets and the cryptocurrency market in general. When the DXY strengthens, it indicates that investors may be flocking to the U.S. dollar as a safe-haven asset, which can lead to reduced investment in riskier assets like cryptocurrencies.

Related

As the DXY's growth affects the value of other currencies, it has a domino effect on global markets. For example, when the DXY rises, commodities priced in U.S. dollars, such as gold and oil, tend to become more expensive for investors holding other currencies. This shift can create a ripple effect throughout the global economy, prompting investors to reallocate their portfolios and seek alternative investments.

Cryptocurrencies, known for their high volatility and speculative nature, are often considered riskier assets. As a result, when the DXY strengthens, investors might opt to liquidate their digital asset holdings to minimize risk exposure, leading to a decline in the value of cryptocurrencies.

Advertisement
TopCryptoNewsinYourMailbox
TopCryptoNewsinYourMailbox
Advertisement
Advertisement

Latest Press Releases

Our social media
There's a lot to see there, too

Popular articles

Advertisement
AD