The main cryptocurrency has fallen to $9068, showing a drop of 2.44% for the week, during trading session on Thursday.
Bitcoin dropped to $ 9000, in spite of signs of growth in early Friday. The recent correction in prices has occurred due to the high profitable sentiment close to the highs has coincided with a reduction of the balance sheet of the Federal reserve that strengthened the dollar, writes newsbtc.
The correlation between bitcoin and the U.S. dollar
According to TradingView.com the US dollar index is at a two-day winning level. He went up 0.56% from its weekly low. Meanwhile, the growth index is almost identical with the fall of bitcoin prices.
Demand for the greenback increased as California, Texas and Florida reported daily increase in cases COVID. Investors would prefer to return to the position, fearing prolonged periods of closure and possible fall in the US stock market.
However, the S&P500 has addressed these concerns on Thursday and closed with an increase of 0.45%. The core index rose in the report, according to the optimistic forecast regarding jobs the labor Department. He showed that the level of unemployment from 13% in may, decreased to 11.1% in June.
Despite the increase, S&P500 is in danger of decline due to a variety of macroeconomic problems. The most important among them is the contractual balance of the Federal reserve system.
Bitcoin and every small and large index on wall street has recovered from a dip in March 2020, only after the US Central Bank announced unprecedented monetary assistance. He has invested in the economy more than $2 trillion, by purchasing government and corporate bonds.
But now, it seems, the fed has slowed their spending. Official data show that the Central Bank’s balance sheet over the past three weeks fell by 2.3%. From 17 June the fed reduced its purchases by as much as $160 billion.
The fed’s balance sheet relative to the U.S. dollar and SPX. Source: Federal reserve
This is the period when bitcoin was in a narrow trading range. Cryptocurrency was unable to secure a break above $9500 and below $9000. Stimulus policies of the fed expires at the end of July.
Earlier we wrote that Max Keiser said that the Iranian and Venezuelan regimes will make the property trump to take the PTS, which would significantly strengthen the main cryptocurrency.
Portal “Coinews” reported that the price of bitcoin continues to consolidate around the major level of support, but need closing at $ 9400 to avoid a more dramatic drop.
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