Bitcoin paused its rally after surpassing $120,000 due to profit-taking pressure from funds, seeking support around $114,000.
Trading activity in traditional financial markets has decreased this summer, along with the weak growth of the S&P 500 index accompanied by the dominance of Nvidia stocks. The USD has dropped 10% this year but faces the risk of a rebound that could be detrimental to risky assets.
MAIN CONTENT
Bitcoin faces profit-taking pressure after surpassing $120,000, with new support forming at $114,000.
The US stock market is stagnant this summer with the S&P 500 index led by Nvidia stocks.
The USD index has decreased by 10%, but the risk of USD appreciation could negatively impact risky assets such as cryptocurrencies.
How has Bitcoin performed after breaking the $120,000 mark?
Investment experts at QCP Capital assert that Bitcoin has paused its rally after surpassing $120,000 due to strong profit-taking pressure from investment funds, creating a support buffer around $114,000.
Bitcoin 'found a local bottom at $114,000, where buying forces began to support again,' said CEO of QCP Capital on 07/16/2024.
John Tan, CEO of QCP Capital, 07/16/2024
It is common for Bitcoin to fluctuate after a hot rally to consolidate long-term trends. Moreover, the decrease in trading volume due to the summer break also eases the liquidity of the cryptocurrency market, allowing prices to establish a new, stronger support area.
Why has the US stock market recorded weak gains this summer?
The US stock market has been noticeably affected by the stagnation in trading since early July 2024, when the S&P 500 index has mainly been driven by Nvidia stocks, while other sectors have remained nearly flat.
The wave of growth in the S&P 500 is mainly based on Nvidia's record performance. This factor reflects a strong focus on the high-tech and chip sector, but also shows that the growth picture of the market is still fraught with instability.
What impact does the decrease in the USD index have on cryptocurrency assets and risky markets?
The USD index has decreased by about 10% in 2024, benefiting assets priced in USD. However, analysts warn that the risk of a USD rebound is increasing, which could exert downward pressure on risky assets such as cryptocurrencies.
'The risk of a sudden USD recovery could negatively impact risky cash flows, creating an adjustment reaction in the cryptocurrency market in the short term,' according to a report from a financial organization in Singapore.
Q2/2024 Report, Singapore Financial Investment Organization
Along with US inflation remaining at 2.5%, the adjustment pace of the USD will increase the market's sensitivity to external shocks. The Fed's unclear direction on interest rate cuts further increases the instability of venture capital flows, including Bitcoin and Ethereum.
What is the reason Ethereum continues to maintain strong momentum during this period?
Ethereum continues to rise in price thanks to positive moves from SBET and increased holding demand from large corporations, according to cryptocurrency investment experts.
Network upgrade solutions and DApp development activities supporting the growth of the Ethereum ecosystem also contribute to strengthening the value outlook of this currency. This is reflected in the trading data and the steadily increasing amount of staked Tokens in Q2/2024.
Frequently asked questions about the current cryptocurrency market situation
What level can Bitcoin adjust to strengthen the trend? Experts at QCP Capital assess that the price range around $110,000 could create a solid base for Bitcoin to recover. How does US inflation impact cryptocurrencies? Inflation at 2.5% maintains relative stability but still poses risks from external economic shocks. Why do Nvidia stocks significantly impact the US stock market? Nvidia leads the market due to record stock price increases, providing support for the S&P 500 to overcome difficulties. Is the 10% drop in USD beneficial or detrimental to cryptocurrencies? The decline of the USD facilitates risky assets, but the risk of a USD rebound could destabilize the market. What highlights does Ethereum have in Q2/2024? Ethereum continues to show strength from technological upgrade policies and increased investment from institutions.
Source: https://tintucbitcoin.com/bitcoin-dieu-chinh-ve-110-000-usd/
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