HomeBitcoinAnalysts believe Bitcoin is benefiting from the decline of the US dollar

Analysts believe Bitcoin is benefiting from the decline of the US dollar

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Dollar Reacts Negatively to U.S. Jobless Claims, Boosting Bitcoin and Equity Markets

The U.S. Dollar Index (DXY) experienced a 0.45% decline following an increase in U.S. jobless claims, leading to a boost in bitcoin and equity markets, according to analysts. The S&P 500 traded near its record high, with the Dow Jones up by 0.85%, the S&P 500 gaining 0.51%, and the Nasdaq Composite rising by 0.27%. Bitcoin also saw a 2.5% increase, trading at $62,927.

Analysts attribute the dollar’s decline to softer U.S. data releases, indicating a cooling labor market that could prompt the Federal Reserve to cut rates sooner. This expectation of a rate cut, coupled with a weaker dollar, may drive investors towards riskier assets like equities and cryptocurrencies.

However, analysts caution that a prolonged dollar downturn could negatively impact credit markets and risk assets. They advise investors to monitor signs of greater growth weakness that could affect risk assets, including cryptocurrencies.

The recent increase in jobless claims and the disappointing U.S. jobs report have fueled the narrative of a slower U.S. jobs market, further supporting the case for a potential Fed rate cut. The GM 30 Index, representing the top 30 cryptocurrencies, has also seen a 2.53% increase in the past 24 hours.

Overall, the market dynamics indicate a shifting landscape influenced by U.S. economic data and the potential for policy changes by the Federal Reserve. Investors are advised to stay informed and vigilant in navigating the evolving market conditions.

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