Why the dollar is rising and cryptocurrencies are falling

12 Jan 2021

The start of the week was remembered by the dollar's growth. The explanations for this were different, ranging from the sharply increased yield of US Treasury bonds (the yield of 10-year bonds, for example, has doubled in the last 3-4 months), ending with an increase in nervousness in financial markets due to the pandemic, weak data on NFP, new coronavirus strains, second impeachment to Trump, etc.

Despite the fact that yesterday's rise in the dollar was the third day of growth in a row, it is still too early to turn over into buying it. So far, we can only state the destruction of previous trends, but not the formation of new ones.

By the way, about Trump. Although little more than a week remains before his inglorious end as President of the United States, the Democrats clearly felt the blood and want to shame him completely and irrevocably. 2 impeachments in one term is not a fact that Trump would like to enter the history with. However, given that there is almost no time left, the likelihood of this is extremely small. Trump's problems turned out to be contagious enough, as evidenced by the sale of Twitter shares after the social network banned Trump's account. It seems that they wanted the best, but in the end, they turned out to be digital dictators and tyrants.

Even more indirectly, due to the social activity of Trump and his supporters, Google and Apple suffered, which removed the Parler social network application from their stores.

Over the past few days, the cryptocurrency market has lost about 20% of its capitalization, or about $ 200 billion, and has officially moved to the territory controlled by bears. The main question now is whether Bitcoin will collapse by another 70-80% in the nearest future or will it wait. It is likely that the Ripple scandal knocked the ground out from under the feet of the bulls. Most of the leading cryptocurrency exchanges decided to suspend the XRP token trading. Among the latter, the second in the coinmarketcap.com rating cryptocurrency exchange Coinbase. Understanding that the recent top 3 cryptocurrency market XRP token in such a scenario could drop in price to 0, acted like a cold shower. And this is rational: if one lawsuit can multiply the capitalization of any token by 0, then buying these tokens at 40K can be a very expensive.

At the right time, these sales were superimposed on the message of Bank of America to their clients, in which they clearly demonstrated that the cryptocurrency bubble is the largest in the entire modern history of the markets and deservedly receives the title of “mother of all bubbles”.