Bitcoin price breaks past $21,000 barrier as US dollar weakens
The price of Bitcoin was below the $19,000 level on Thursday morning, at one point hitting its lowest point since June, due to a decline in global equity markets and the continued resilience of the US dollar.
However, it was a different scenario on Friday afternoon, Eastern Time, when Bitcoin broke past the $20,000 barrier and improved by a significant 8% over the previous 24 hours.
Bitcoin price reaches $21,112 on Friday
At the time of writing, Bitcoin is trading at $21,112, up nearly 5% in the past seven days, data from Coingecko shows.
The world’s leading cryptocurrency aimed for its best day in a month and a half on Friday, as the US currency plunged and markets found reasons to appreciate at the end of a dismal week.
On Friday, all the leading tokens, including stablecoins, traded with significant gains. Solana gained about 7%, while Avalanche and Polkadot rose 5% each.
In most parts of the world, central banks are tightening monetary policy to combat high inflation. The Federal Reserve in the US has implemented a series of interest rate hikes totaling 2.25 percentage points as markets prepare for further rate hikes.
In the previous 24 hours, the global market value of cryptocurrencies increased by almost 2 percent, reaching $994 billion. Still, total trading volume fell by more than 5 percent to about $73.5 billion.
Bitcoin price set for second consecutive weekly increase
Friday’s broad-based optimism across asset classes, led by a decline in the safe-haven US dollar and a rally in Chinese shares, was cited by market participants as the sole reason for the gains.
If cryptoassets are able to sustain their gains through Sunday’s close, the Bitcoin price could record its second consecutive weekly gain and its best week in about a month.
Meanwhile, Bitcoin leads the pack with total liquidations exceeding $80 million. This is a change from previous weeks, when Ether (ETH) dominated derivatives trading volume.
The merger, which will transition Ethereum’s protocol from proof-of-work (POW) to the more energy-efficient proof-of-stake (POS), is just a few days away.
The merger: POW to POS
The transition is expected to drastically change how transactions are processed and reduce energy consumption. Several exchanges intend to suspend deposits and withdrawals during the upgrade.
The US central bank’s tightening has strengthened the USD, which has weighed on risk assets. The 10-year US bond yields have also increased.
The Bitcoin price has historically traded in tandem with stocks, so if stocks fall, so does the digital asset.
According to Vijay Ayyar, vice president of corporate development at crypto exchange Luno:
“If the US dollar starts to retreat, risk assets like bitcoin should start to rise again.”
BTC total market cap at $403 billion on the daily chart | Source: TradingView.com Featured image from Smithsonian Magazine, chart from TradingView.com
