Let’s start with great news. Bitcoin reached another all-time high on Friday, as the largest cryptocurrency has the chance to become a trillion-dollar asset. Importantly, a recent price explosion in the Bitcoin market pushed its costs to over $52,000 per token, more than double its December 2020 nadir. Interestingly, Bitcoin’s meteoric rise also sent its momentum indicators into an overbought area. As a reminder, it typically amounts to a downside correction in the medium-term. Interestingly, the dollar traded shy of recent highs on Thursday.
Let’s get back to the largest cryptocurrency. The BTC/USD rate exchange rate could collapse by as much as 50% from its current levels. Moreover, a correction of more than 50% would lead to broader bearish moves, eventually ending Bitcoin’s ongoing bull cycle.
Interestingly, the cryptocurrency risks a massive downside move, even though it comes after topping out-for instance-at the $70,000-level. The founder of FX Hunter Wealth David Hunter thinks that any amount of downside correction wouldn’t be able to push Bitcoin below $36,000.
Dollar and U.S. economy
As stated above, the dollar traded shy of recent highs on February 19 after its first back-to-back gains as optimistic data bolstered expectations that the U.S. economy would recover from the coronavirus pandemic faster than the economies of most of its peers.
Interestingly, government cheques helped U.S. retail sales rebound in January. Moreover, industrial output, as well as producer prices data, also provided upside surprises.
Also, investors expect a further boost from President Joe Biden’s proposed $1.9 trillion COVID-19 relief package. Moreover, next week Biden will meet with top labor leaders. This meeting is a great chance to make his plan more popular.
It is worth mentioning that, the coronavirus pandemic decimated many industries. In the case of the airline industry, it could take several years to get back to pre-coronavirus levels. Unfortunately, millions of people all over the country are looking for a job.
This fact underscores the scale of the issue. Moreover, it won’t be easy to deal with all problems created by the pandemic in a short period of time. The new administration understands the severity of the situation. The White House should work with lawmakers from both parties to reach a deal as soon as possible.
As can be seen from the information stated above, investors are closely monitoring the situation. The world’s largest economy has the potential to improve the situation. However, politicians and companies should work together to reach to support the economy.