The dollar surged in value versus major currencies on Monday morning in London, placing additional pressure on the crypto market ahead of several key central bank announcements this week, including the Federal Reserve Bank.
The US Dollar Index, which compares the dollar to a basket of other currencies, increased 0.12 percent to 96.190 points.
Bitcoin has been unable to break over a key resistance level of $50k due to reduced long positions in the bitcoin derivatives market, while Ethereum bulls are trying to keep $4K due to cautious investor sentiment.
The crypto market’s dynamics are shifting after an infinite supply of fiat currency aided in driving prices higher, notably in bitcoin and ethereum, which are limited.
Institutional investors, according to some analysts, may refrain from taking large risks during the final weeks of December for tactical reasons. As a result, we anticipate that crypto will stay range-bound into December.
Markets have been volatile since Omicron was identified due to fears about its impact on economic recovery. However, investors left safe-haven assets this week following reports that the variant may not be as catastrophic as previously believed.
Throughout the week, a number of emerging-market central banks and six G10 central banks will convene, beginning with the Federal Reserve on Wednesday.
Central banks will have to find a delicate balance between Omicron-induced uncertainty and rising inflation in order to achieve a balance.
Interest rate hikes may be increased when the Fed’s asset-purchasing program is boosted. By May 2022, investors anticipate that an interest rate hike will be more than 50% likely.