Welcome to the weekly edition of Overbit News, where we try to round up what’s been going on in cryptocurrency as well as traditional markets. For this week’s edition, we decided to put macro narratives on the backburner and heavily focus on recent price action in the markets, as we imagine that’s where most people are looking to on such a down week.
We start off today’s edition by taking a look at the cryptocurrency markets, where sentiment is plummeting as the entire space sees a massive selloff - one that many analysts are attributing to a $USD breakout. Leading this selloff was the #1 cryptocurrency, Bitcoin, which broke down all the way to $10,200. BTCUSD has recovered some of these losses and now sits at $10,517 at the time of writing. The fate for #2 in the cryptocurrency space, Ethereum, didn’t fare much better. ETHUSD suffered a 12% crash and has only recovered slightly, currently trading at $348. On a market-wide perspective, cryptocurrency shed more than $22 billion in total market capitalization in the last 24 hours. ETHUSD was responsible for more than 25% of this loss, losing $4 billion in market cap on its own. While this could be a temporary dip, it’s important to note that surges in volume were seen across the board during this selloff. Volume has averaged around $106 billion in the last few weeks, yet it rose to a local peak of $130 billion during the selloff, indicating that bears have the momentum in the short-term.
Moving on from cryptocurrency, we take a look at traditional markets and more specifically commodities. Much like the cryptocurrency market, this asset class was not spared from the massive selloff induced by the $USD breakout. Spot gold fell the most in almost five weeks, falling nearly 3.5% to $1882.51, with silver plunging as much as 11%. We spoke about the precarious position for gold in a recent edition, especially given the current dominance of the $USD, so this comes as no surprise to see such a volatile move. This breakdown was not limited to precious metals and commodities, either. Stocks tumbled as well to start the week due to growing concerns of tightening pandemic restrictions, as well as the surge of the $USD. To keep it short: “Equities fell out, and the dollar strengthened amid the broad risk-off sentiment in the market,” said Janet Mirasola, managing director at Sucden Futures.
In the future, it’s impossible to ignore the continuing and downright bombastic dominance of the US dollar. For better or for worse, today’s markets are undeniably tied to the ebbs and flows of the US Dollar. This means all investors should stay up-to-date on any happenings within the world of American politics, and specifically fiscal policy. With U.S. Federal Reserve Chair Jerome Powell set to appear before House lawmakers Tuesday, traders and investors should stay light-footed in their trades and investments. Even more so, in fact, given the increasingly contentious American presidential election due to the recent Supreme Court presidential. Besides staying on top of current events, the best way to stay ahead of the game is to trade with Overbit.com.
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