Bitcoin (BTC) continues to test the 10,000 USD support after a weekend in which it consolidated after a big drop. What’s next?
Cointelegraph takes a look at the main factors that will influence BTC’s price action in the coming week.
Keiser: US dollar index has to fall below 80
The end of last week saw big changes in the BTC/USD; the pair fell more than 15% from USD 12,050 to bounce back to USD 9,900.
The weekend failed to produce a significant rebound, with the USD 9,900, and several more tests were conducted before Bitcoin fell back into five figures.
What changed on Friday was a macro factor: the US dollar index (DXY), which began to rise after reaching two-year lows.
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The DXY measures the USD against a basket of currencies from US trading partners. A week earlier, a Federal Reserve inflation announcement had a downward impact on the index, but last week saw a change in its fortunes, at the expense of safe havens.
At the time this article was published, September 7, the DXY was at 92.95, having risen to 93.25 over the weekend. For RT presenter Max Keiser, further losses are necessary for Bitcoin to win, and the inverse correlation between cryptosystems and DXY should continue.
„We need to get the DXY down to 80 so that the real fireworks get going on #Bitcoin and Gold,“ he tweeted.
Keiser added that the ongoing development of the Brexit saga could also be a positive influence on the BTC next month. If the European Union takes a hard line stance with the UK, the Euro could benefit and put pressure on the DXY.
„Let’s hope that the EU cuts back (the UK) in October, freeing up the euro to trade higher. This will help Bitcoin a lot,“ he wrote.
The moment of truth for politics in Europe
On the subject of geopolitics, the many events this week can serve to direct the markets, with Bitcoin Billionaire reacting at the same time.
In addition to the failed preparations for the Brexit talks, the EU will be looking at economic policy when the European Central Bank (ECB) meets to discuss its options.
As Cointelegraph noted, deflation has returned to the ECB’s sphere of influence for the first time since 2016. Now, attention will focus on whether the copy of the US approach is appropriate for the eurozone.
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As Bloomberg reported on Monday, the global recovery from the March coronavirus fall, which was once robust, is now failing.
„High-frequency data shows a rapid rebound in the second quarter and stagnation, with activity still well below pre-virus levels, in the third quarter,“ said the publication’s chief economist, Tom Orlik.
To return to „previrus normality,“ he added, all that would work is a vaccine against the coronavirus.