Guys, pay attention to Dominance Tether
The reason for this drop a few hours ago could be the increase in Tether's Dominance
Currently, Tether has reached the resistance zone and there is a possibility of a small correction, and if this happens, we will see an increase in the price of Bitcoin.
The reason for this drop a few hours ago could be the increase in Tether's Dominance
Currently, Tether has reached the resistance zone and there is a possibility of a small correction, and if this happens, we will see an increase in the price of Bitcoin.
The relationship between US dollar dominance and Bitcoin price is complex and multifaceted, influenced by various factors. Here are some key points to consider:
Correlation: In the long term, the correlation between US dollar dominance and Bitcoin price has been negative. This means that when the US dollar strengthens, Bitcoin's price tends to decline, and vice versa.
Reasons for this correlation:
Risk: Bitcoin and the US dollar are often perceived as risky assets. When demand for risky assets increases, investors tend to allocate their funds towards stocks, real estate, and other traditional investments considered more stable. This can lead to a decrease in Bitcoin's price and an increase in US dollar dominance.
Monetary policy: The monetary policies of the US Federal Reserve (Fed) can significantly impact Bitcoin's price. When the Fed raises interest rates, it typically leads to a stronger dollar and a weaker Bitcoin price.
Market sentiment: Overall market sentiment can also influence the relationship between US dollar dominance and Bitcoin price. During bull markets, investors are more risk-tolerant, which can lead to a rise in Bitcoin's price and a decline in US dollar dominance.
However, it's crucial to note that the relationship between US dollar dominance and Bitcoin price is not perfectly linear.
Other factors can also affect Bitcoin's price, including:
News and events: News and events related to Bitcoin, such as cryptocurrency exchange hacks or widespread Bitcoin adoption by companies, can significantly impact its price.
Supply and demand: The demand for Bitcoin is increasing, while its supply is limited. This can lead to a price appreciation for Bitcoin in the long run.
Investment diversification: As investments diversify into other cryptocurrencies, gold, and other assets, Bitcoin's reliance on the US dollar decreases.