Here Are 8 Triggers That Beat The Price Of Bitcoin and other cryptocurrencies in trading Tuesday (11/1) stems from macroeconomic developments. The United States one of which is the certainty of the Fed’s plan to accelerate the rate hike. Based on the minutes of the central bank meeting in December 2021.
Bitcoin Is Increasingly
According to Triv’s research, quoted Tuesday (11/1), the Here Are 8 Triggers That Beat The Price Of Bitcoin markets will continue to decay in 2022. Due to central bank, monetary and macroeconomic policies. This is due to at least eight of these causes.
First, the price of Bitcoin is increasingly correlated with stock prices throughout 2021, reaching several highs in December 2021.
According to data from Bloomberg, as of December 3, 2021, the 100-day correlation coefficient between Bitcoin and the S&P 500 is 0.33. Where 1 means they always move together and -1 means they are totally different.
The value of 0.33 is indeed relatively small but relatively moves together in although not always, so that it should be used as a benchmark for analysis.
The Crypto Market
“In other words, to monitor the trend of the crypto market, it is necessary to monitor the capital market, whose analysis base stems. From macroeconomic policies in the US, as the largest capital market in the world. The Fed has a big factor in such economic policies,” wrote Triv’s research quoted on Tuesday (11/1).
Second, the matter of tapering as another effort to suppress inflation in the US. Tapering is the rapid and gradual reduction of the value of the Fed’s asset purchases. These assets include government bonds and a number of corporate bonds.
Benchmark Interest Rate
Third tapering will automatically encourage the Fed to raise its benchmark interest rate and following. Commercial banks will increase the cost of credit (borrowing capital), both to individuals and companies.
The effects of central bank policies will usually be felt the latest for 1 year in the process gradually the rate of spending by consumers will also decrease. Because they decide to be more frugal, because the level of liquidity decreases in business marketing plan.
This will form strengthening of the dollar index value against major currencies such as the euro, yen and so on.
Strengthening Of The Dollar
For the US government the strengthening of the dollar and all of the Fed’s monetary policies. Will reduce the cost of importing goods from abroad which can reduce the prices of goods and services at home. Here, the problem of inflation is almost certainly resolved.
The scenario of with drawing dollars in order to reduce high inflation followed by bearish turmoil in the stock market. Including trading in high-risk assets such as cryptocurrencies.
The corporate side the higher and capital can actually reduce the supply of products to consumers, although this is helped somewhat by the low cost of imports.