The price of bitcoin (BTC) fell to the level of USD 19,000 after spending 7 days without touching this range. After hitting a 25-day high of $22,300 last week, the cryptocurrency has started to depreciate as the dollar strengthens against the euro.
The fall of bitcoin to the level of USD 19,000 occurs at the same time as the historic loss of value of the European currency.. The euro, which for the past 20 years was valued more than the dollar, is currently trading at 1:1 to the US currency.
This scenario reflects the collapse of the macroeconomic context as we have known it until now while inflation increases globally. Such a situation does not occur only in Europe, Latin American countries, such as Argentina, Chile and Colombia, are also suffering strong depreciation of their currencies against the dollar and higher inflation.
The dollar gains strength in the face of market turbulence
As specialist Eduardo Gavotti explained to CriptoNoticias, this trend occurs as investors lose appetite for risk. Due to the bleak economic environment, people tend to hunker down in “safe” assets until the dust settles. The dollar is the asset that has fulfilled this role for decades and does not seem to want to stop being so.
That is why the dollar is experiencing an increase in demand that causes its price to rise. Meanwhile, the cryptocurrency market, as well as the stock market and even gold, are in the red, showing falls.
Part of it is also due to fears of rising inflation and interest rates in the United States, something that has been driving low demand for bitcoin and other assets. And to this is added the concern that there is about the analyzes that warn that we will enter or that we are already immersed in a recession.
In this regard, Temasek Holdings, the Singapore government investment company, communicated forecasting a “mild recession” in the United States by 2023. He summarizes that the world economy “is in a fragile state”, which is why it is interpreted that bitcoin and the markets in general could continue to be turbulent.