Some of the Bitcoin investors are worried about the rece drops. The approval of cash ETFs in the US failed to push the price to higher levels, and on the other hand, the pressure of selling Bitcoins of the Grayscale exchange fund is still felt in the market. Now the market is faced with a new problem and that is the strengthening of the dollar index (DXY).
Rapid recovery of dollar index, alarm bell for Bitcoin
According to Coielegraph, the dollar index, which measures the performance of the US dollar against a basket of major world fiat currencies, has experienced a 2.17% growth since registering a low of 100.617 on December 27 (6). The reason for this positive performance is clearly the publication of promising and positive economic statistics in the United States.
These positive statistics include data related to the retail sector, the Philly Fed Manufacturing Index (specifically measuring the growth of businesses in 3 US states) and the volume of unemployme insurance claims, all of which together pushed the dollar index to its peak in 2024. They reached between 103.65 and 103.70.
Statistics from the US Census Bureau show that the retail sector registered a growth of 0.6% in December 2023, which was 0.4% forecast and also 0.3% higher than the previous period.
Another reason for the growth of the dollar index is the increase in the yield of the US treasury bonds, which is related to the decrease in the probability of a decrease in the bank ierest rate by the Federal Reserve uil March.
From the poi of view of technical analysis, there is a possibility that the dollar index will experience a growth of 1.12% from the curre levels; Because a weekly return pattern (V-shaped) is formed on the chart.
If the dollar index succeeds in crossing the level of 104.56, the chances of the chart to recover to the level of 107 in the next few mohs will increase.
The impact of Grayscale’s heavy selling on the price of Bitcoin
Since the launch of Bitcoin Cash ETFs on January 11 (Dec 21), huge sums have come out of Grayscale’s coffers. More specifically, since the Greyscale fund became an exchange-traded product, 38,000 bitcoins have been withdrawn, which is worth $1.577 billion at today’s prices.
Only on January 12 (22nd), $484 million was withdrawn from this exchange fund, which shows that a significa number of shareholders of this fund have used the option to buy back their shares. Peter Schiff, a famous economist and one of the investors of the gold market, has recely considered the reason why Bitcoin did not grow after the approval of cash ETFs, the same Grayscale’s coinuous sales.
The possibility of a price drop of up to 34 thousand dollars
Cryptocurrency analyst Ali Martinez has drawn a bullish channel on Bitcoin’s 3-day chart, with price candles oscillating from late 2022 to today. Martinez sees Bitcoin’s rece correction as the result of a return from the ceiling of the channel.
He expects Bitcoin’s correction to coinue with the price falling to the bottom of this ascending channel near $34,000.
On the other hand, analysts at Saimet Group, which provides special statistics on the digital currency market, believe that the market is still optimistic about the positive impact of Bitcoin Cash ETFs for the long term. However, they say that if investors turn negative towards cash ETFs after Bitcoin’s rece slide from a high of $49,000 to a rece low of $40,600, this factor that has driven the price up in the past could sell. Novice investors.
