Crypto market experts caution about the rising US Dollar’s impact on digital assets amid declining sentiments, as per QCP Markets report.
As sentiments plummet, crypto market experts have identified the strengthening U.S. dollar as a constraining factor in digital assets. A fresh report from QCP Markets illustrates the repercussions of the dollar’s ascent on cryptocurrency prices.Â
According to the report, inflation and macroeconomic factors could force other central banks to delay a response until the Federal Reserve reduces interest rates. A second reason cited was the divergence between the United States and other nations.
According to the report, specific factors will impede an uphill market surge amidst the recent decline in cryptocurrency prices. Large banks and institutional investors continue to anticipate two rate decreases this year, with the first potentially occurring in early September. The Federal Reserve maintains its current stance on interest rates, attributing it to the imperative of controlling inflation. Â
Rate cuts may cause investors to transfer capital into riskier assets, which could cause cryptocurrencies to appreciate. Investors’ withdrawal of capital from high-risk assets in response to interest rate increases in the previous year affected market sentiment.
As of the moment of writing, the price of Bitcoin is $61,253, reflecting a 2% decrease over the previous twenty-four hours. The aforementioned decline is reflected in the prices of other cryptocurrencies, including Dogecoin, Ethereum, Solana, and Ripple.
Additionally, QCP analysts noted a decline in inflows to spot Bitcoin ETFs. Flows into the market increased last Friday, but investors have begun to retreat in response to recent events. The company recommends top-down approaches that offer consumers a risk-reward ratio.
In the first quarter, industry discourse was dominated by Bitcoin ETFs as the asset price reached a record high.
