It is Monday. Bitcoin is holding above crucial technical support at $11,400. Meanwhile, its safe-haven rival, the US dollar, is experiencing a sharp decline.
The inverse correlation between the two stark assets is visible all over again. Only this time, the catalyst that is driving them into different directions is a Jerome Powell speech on the future of cross-border payments at the International Monetary Fund’s (IMF) annual meeting at 8 am ET today.
Here are three possible reasons that may have catalyzed Bitcoin’s recovery and the US dollar’s slump ahead of Powell’s speech.
#1 Pre-Conceived Notions for Bitcoin
The Federal Reserve chairman would likely speak in favor of the digital currencies for their ability to conduct global payment transfers speedily and cheaply. Quantum Economics’ founder, Mati Greenspan, believes that Mr. Powell’s outlook on cryptocurrencies would be vital to understand their future in the US regulatory space.
Independent market analyst Scott Melker also tweeted that he will “definitely be paying attention,” possibly for any cues on how Mr. Powell’s words would impact Bitcoin, the leading cryptocurrency of all.
Traders may have interpreted the analysis as their sign of opening short-term upside positions in the Bitcoin market. On the other hand, the dollar’s decline fueled the intraday bullish sentiment.
#2 China’s Growth
In the hours leading up to the panel meeting, BTC/USD has surged by 1.01 percent to circa $11,524. At the same time, the US dollar index, which pits the greenback against a set of leading foreign currencies, has dipped 0.52 percent to 93.27.
The US dollar experiences a sharp sell-off on Monday. Source: DXY on TradingView.com
“The DXY looks kind of weak,” tweeted Michaël van de Poppe, an independent market analyst. “[It] would suit BTC, in general.”
Global reports see the US…