Researchers at the crypto exchange Binance say the strength of the US dollar will determine where the Bitcoin and crypto markets head next.
A new trading report highlights the recent negative correlation between the dollar and alternative assets such as crypto and gold.
Researchers say last month’s pullback in the crypto markets seemed to have been influenced by retracements in the global equity markets in the wake of the pandemic that sowed widespread economic uncertainty.
“The US Dollar has been a key driver of Bitcoin’s success this year. Although, the recent upswing in the dollar has driven crypto assets lower. Any indications of weakness or a continuation of the Dollar’s relentless selling will trigger the next wave of buying in alternative assets such as Bitcoin.”
According to data from Binance Future, open interest in Bitcoin fell from $1.1 billion to $650 million in September. Since then, open interest has recovered, increasing to $960 million.
Despite the recent market downturn, investors have made decent gains and are undeterred by short-term volatility in Bitcoin price and BTC’s fundamentals remain strong, says Binance.
“As they say, no bull market goes up in a straight line. While it can be nerve-wracking, market corrections do occur regularly during bull markets. Market corrections can be healthy, adjusting overvalued prices, and providing buying opportunities…
many analysts remain optimistic about crypto assets in the medium to long term. Investors will keep a close eye on macroeconomic trends for indications of Bitcoin’s future direction.”
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