New One-Week Low In Bitcoin Thanks To Rally In US Yields
On Monday, the 11th of January, 2020, something finally happened that many a Bitcoin investor had dreaded: The crypto market saw a steep correction. Bitcoin saw a drop of an excess of 12%, going down to a new one-week low. As for why, the rising yields in US bonds can be to blame, as it lifted the USD up, as well. As is the norm, any and all “safe” assets saw a hit due to the fact that they don’t generate an inherent income.
BTC And ETH Drop Amid USD Success
Bitcoin saw its lowest drop since the 6th of January, 2020, going down to as little as $33,447. As is the norm, once Bitcoin moves, every other cryptocurrency is dragged along with it. Ethereum, in particular, saw a 1-week drop that resulted in the crypto reaching a low of $1,007.51
This massive price drop is in quite some contrast compared to the Gold markets, which managed to drop to a 1-month low by losing only 1% in value. However, this trend stands as a result of the USD bouncing back against the rest of the world’s major fiat currencies. With promises of higher interest rates within the US, people are starting to bet more confidently on the USD.
Bitcoin And Gold Used In Similar Ways
Chris Weston stands as the Head of Research at the Pepperstone brokerage in Melbourne. In his view, this price change is, in essence, an expression of the current dollar view. Weston is also convinced that this stands as a macro play in general, adding that he believes that Bitcoin and gold are being used in a “similar capacity.”
It wasn’t long before the world’s most popular cryptocurrency bounced back, albeit slightly. As it stands now, the cryptocurrency is trading at around $35,240, with its new all-time-high set at the $42,000 mark. Bitcoin had managed to achieve this spectacular price just last week.
Bitcoin Has Seen A Volatile Year
Should this new price be sustained, this big drop will stand as the third session of straight losses seen since that high was achieved. It should be noted, however, that the cryptocurrency had grown over 1000% since its one-year low recorded back in March of 2020, when the currency was trading for just $3,850 at the time.
Bitcoin has seen a monumental increase in interest of late. This is primarily thanks to the institutional players taking notice of the asset, buying heavily into the world’s first cryptocurrency. In the institutional eye, Bitcoin is seen as a way to gain a profit and otherwise hedge against inflation hitting the world at large. The inflation itself is only worsened by the governments of the world printing money to try and keep the economy going.
