United States Dollar is causing enormous pressure on cryptocurrency market once again
The cryptocurrency market is being pressured once again as the U.S. dollar is aiming at yet another rally that may put it back above its multi-year high. In the meantime, XRP and Cardano’s price performance is causing anxiety.
DXY on its way up
In the last 24 hours, the U.S. dollar has been aiming at new highs as it reached the multi-year trend’s resistance level the second time in two weeks. The resistance was previously marked as a reversal point for the currency and the start of the recovery for risk-on markets, including cryptocurrencies.
DXY’s strong performance could be the main reason behind the plunge Bitcoin and other cryptocurrencies are making today. In the last few hours, BTC lost more than $300 from its value and breached the $19,000 support level, reaching the lower border of the consolidation range.
Unfortunately, technical analysis is a secondary factor for DXY, and its performance is mostly tied to the monetary policy of the United States. Until the Fed’s pivot, USD will continue to go up as rate hikes make stable investment opportunities more interesting, while risk-on assets like Bitcoin and other cryptocurrencies suffer in a market like this.
Bitcoin’s reverse correlation with DXY has recently reached a record-breaking level as the first cryptocurrency has been strongly following the performance of the USD. The same tendency applies to stocks. Unfortunately, Bitcoin’s correlation did not show itself during the recovery on the stock market, which raised even more concerns and risks among holders.
Cardano and XRP falling together
Cardano and XRP have been moving in similar ways in terms of avoiding general market conditions. However, the independence of both assets is not playing in their favor. Both Cardano and XRP are experiencing troubles on the market in the last few weeks as ADA lost more than 20% of its value.
XRP did not go through such a severe correction but still faced some serious troubles on the market by getting denied around the local price level and getting pushed below the 50-day moving average, which acted as a barrier between the downtrend and uptrend.
Unfortunately, most technical and market signs are showing that XRP will continue falling down as volume profiles remain at extremely low levels for the last few days and investors are not rushing to support the continuation of the rally on the asset.
The rule applies to Cardano, which is falling into multi-month lows for the last few weeks now. Obvious problems with the profitability of ADA are not something new for the cryptocurrency market as it remains one of the worst performing assets in the whole industry. With the most recent plunge, the situation has become even worse.
Read More: Crypto Market Review, October 21