Categories: Crypto NewsNews

Bitcoin slips back below R339K as investors take safety in the US dollar

Published by
Nonhlanhla P Dube

Bitcoin (BTC-USD) is trading back beneath its key technical mark in early Tuesday am trade, as fears of a recession grow and financial circumstances deteriorate.

The token is down 3.3 % to less than R336K as of just before 9:00 a.m. ET, having traded as low as R331K earlier in the session. Since mid-June, Bitcoin (BTC-USD) has been range-bound. Similarly, Ethereum (ETH-USD) has dropped 6.8 % in the last 24 hours to R18K.

According to CoinMarketCap data, the global crypto market cap is down 3.5 % to R14.9 trillion.

“It is indeed surprising that Bitcoin has remained range-bound for such a long period, considering the geopolitical and macro-economic factors at large,” Nick Heale, head of Corporate Advisory at U.K.-based digital asset broker GlobalBlock, wrote in a note. “In China, we have heard reports of bank runs due to depositors’ accounts being frozen, a default of Sri Lanka, not to mention the ongoing war in Ukraine and escalation of Covid measures in China, which will continue to impact the supply chain.”

The crypto collapse comes as financial markets are concerned about recession concerns and a soaring dollar, which has reached parity with the euro (FXE) for the first time in 20 years. The trade-weighted US dollar index is up 0.15 % versus a basket of key currencies to 108.18, up a stunning 17.2 % year on year, raising the prospect of a worldwide deflationary slump.

“We remain very bullish on the USD $DXY,” Piper Sandler Chief Investment Strategist Michael Kanto stated on Monday via Twitter.  

On Wednesday, investors will be looking for consumer price inflation data, with the consensus for June being +8.8 % year on year, up from +8.6 % Y/Y in May. If that happens, the Fed may be more inclined to raise interest rates. During the past year of rising inflation, bitcoin (BTC-USD) either consolidated or declined immediately following a CPI measurement, implying that the world’s largest digital asset by market capitalization does not operate as an inflation hedge.

Crypto-related equities are also down as stock futures point to a lower open. Coinbase (NASDAQ:COIN) is down 1.5 %, MicroStrategy (NASDAQ:MSTR) is down 1.8 %, Marathon Digital (MARA) is down 1.3 percent, Riot Blockchain (RIOT) is down 1.6 %, Silvergate Capital (SI) is down 0.5 %, and Bit Digital (BTBT) is down 1.3 % in premarket trading.

Macro scholar Paul Krake stated earlier this week (July 11) that crypto and bitcoin are “BS” and replete with fraud, and that most coins will “go under.”

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Nonhlanhla P Dube

Nonhlanhla P Dube is a senior news reporter at Rateweb. Nonhlanhla is a student of International Relations at the University of South Africa. She reports primarily on personal finance and economics. You can contact her directly by email at nonhlanhla@rateweb.co.za

Published by
Nonhlanhla P Dube
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