The financial market is upside down; cryptocurrencies have experienced drastic changes in the last hours of this July 14, where desperation increases and cryptocurrency investors do not know whether to sell, buy or hold their crypto assets. You can visit the bitql website.
We are facing a scenario that possibly heralds a much stronger crisis than the one Europe and the United States are going through.
The dollar and the Euro have been equated to the same value, something that has not happened for 20 years, and of course, there is a stir among users of cryptocurrencies, specifically Bitcoin.
On the day of the various financial markets these the Asian, European and American, what happened with the dollar index, known as DYX, was unexpected; despite the negative news that enveloped North American finances, it was strengthened and made Bitcoin decrease its value a little more.
What about BTC/USD?
The continuous inflation that the United States is going through directly affects the economy and the financial markets, leading all its participants down the street of bitterness.
The historical fact of reaching the same value as the Euro has left many surprised, which means that any pair of currencies, whether Fiat or digital, if accompanied by the dollar, could expect an exciting rise.
When talking about BTC / USD, reference is made to the union of digital currencies, in this case, Bitcoin (BTC) and Fiat currencies, the Dollar (USD); it is usually the ideal combination for many traders because despite being a decentralized currency it is based on the movements that the dollar can generate.
In addition to being used to carry out short trading operations, this cryptocurrency offers its users the possibility of making commercial electronic payments for purchases or investments; consequently, various companies receive them among their means of payment.
This union may contract a little the volatility that Bitcoin has. Still, in the same way as great returns can be generated, large sums can be lost in a matter of minutes.
After the rise of this combination, many investors considered that the fall of Bitcoin would possibly stop something that for many is not yet going to happen.
It all boils down to the fact that after the CPI report in the United States, inflation and a possible economic recession may be looming if the Fed does not retract in terms of increases in interest rates, mainly in mortgage and personal loans.
The Bear Market that seems never to end
The first half of 2022 has shown that the stock markets and crypto markets are not having one of their best moments; this does not indicate that many have made significant profits with these downtrends, but rather that the global approach to the economy and finance is not it’s not encouraging.
The diversified mix of geopolitical, economic, and financial factors such as excessive inflation, high-interest rates, problems in supply chains, and the energy crisis where oil and its derivatives are the protagonists are affecting world powers that have a rebound effect throughout the world and therefore finances.
This bear market is being compared to the one experienced in 2018 by cryptocurrencies, where the global scenario was not the same. Still, their recovery was imminent, so investors often wonder how much longer it will take for Bitcoin to rise?
There may not be an effective answer to this question since it is not seen that the Central Banks retract their extreme measures in terms of interest rates and are less concerning the control of inflation.
To get out of the crypto winter
Decentralized finance is positioned, and its objective is to make a leap that allows changing the dynamics of the traditional economy and digitizing it, thus achieving only a change in trend that enable financial entities to demonstrate the potential of cryptocurrencies.
The first aspect would be the transcendence of Ethereum to Ethereum 2.0, where mining would be left out. Instead of creating more units through Proof of Work, it would be through Proof of Participation, which would logically increase its market value.
The approval of the SEC of a Bitcoin Spot ETF where investment options are diversified and in addition to important companies and individuals who wish to invest in Bitcoin.
Another aspect could be the acceptance of cryptocurrencies as legal tender currencies, as El Salvador has done.
Digital currencies are marking their trajectory. These scenarios will serve for future analysis when there is a change in this downward trend, for more relevant data to enter Bitcoin-Prime trading system.