Following weeks of struggle, and a perception that the bears are on the verge of taking over, the cryptocurrency market is finally on its way to taking a bullish turn. This shift in trend can be most apparently observed in BTC prices which are at a six-week high, and finally above its narrow range of the prior month, pushing towards $21,000. Analysts suggest that the break has finally managed to come after a consistent weakening of the US dollar, which has increased BTC’s gold correlation by a significant margin. This increased safe-haven status that the cryptocurrency is enjoying definitely plays into this upward market surge.
Highlights of the week
- Both Etherium and Bitcoin prices have been trading at six-week highs, after months of uncertainty and an inability to rise beyond resistance points. Analysts state this trend in the wider market is borne directly from the weakening of global currencies and consistently falling confidence among US consumers.
- Following the wide successes in launching a central bank digital currency in China and Hong Kong, the US Federal Reserve Governor, Christopher Waller, finally broke his silence on the phenomenon. He displayed serious pessimism about the concept, saying it offers little practical benefit and is essentially a checking account at the central bank.
- The Public Opinion University Institute, earlier this week, published poll findings from El Salvador which showcase widespread unpopularity of the idea of BTC being legal national tender. The country’s highly popular president, Nayib Bukele is a vocal supporter of cryptocurrencies and a believer in its prospects. He had been profusely campaigning for wider crypto-asset acceptance, amid negative perception amongst El Salvadorians.
- In the most recent App Store policy guidelines, Apple is seemingly taking a hard stance on digital assets, by only permitting approved exchanges on its platform. Considering that Apple is solely encouraging in-app purchase currencies, critics point out that the tech giant is attempting to restrict money flow to its own ecosystem.
- In a potentially major milestone for crypto-acceptance, money transfer giants PayPal and Western Union have filed for trademarks covering wide cryptocurrency-related services. These filings point to the inevitability of crypto-assets entering the mainstream, with these giant financial services companies rushing to capture the growing opportunity presented.
Crypto fear & greed index
After a month and a half of lingering in the extreme fear zone, crypto-market sentiment has finally taken off in recent days, showing a significant improvement. The index, which hovered around the extreme fear zone of 20, since mid-September now stands at 32, indicating a sudden, market-wide shift in attitudes and perceptions about the future. Market sentiment, on the basis of these figures, saw an upgrade from ‘extreme fear’ to ‘fear’, coming as much-needed progress, and a step in the right direction.
As shown above, this sentimental improvement stems from failing confidence in global currencies, specifically the US dollar that is backing them. The result is cryptocurrencies increasingly becoming safe-haven assets to turn to during these wider uncertainties. As these trends are likely to continue, market sentiment is expected to arrive at a stable equilibrium point between greed and fear, within the foreseeable future.