On the list of failures, cryptocurrency has failed to fulfil its purpose of being a store of value.
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Thus, when the charts began to trend upwards as of Friday, I began to wonder, what could be the trigger for such a rally?
Is it another bear market rally?
Or has the Queen’s passing got to do with it?
That couldn’t be. (RIP Queen Elizabeth).
In this recent rally, the granddaddy of cryptocurrency, Bitcoin, can clinch above the $20,000 psychological mark.
Weakening US Dollar
According to CNBC, the weakening of the U.S. dollar sparked the rally. The Dollar Currency Index reached 110.7 before weakening throughout the rest of the week.
Bitcoin Breaks Past $21,000, Inspiring Market-Wide RallyBitcoin has broken $21,000 after sitting below $20,000 earlier this week. The surge has helped the crypto market bounce…
cryptobriefing.com
Currently, Bitcoin trades at $21,294 as of writing, 7.44% in the green in the past five days.
However, the cryptocurrency is still down 53.68% YTD.
Gone are the days of Bitcoin going to the moon?
Speculation, as usual
Surprise, surprise. Another speculative play by investors pushed Bitcoin upwards of $21,000. That rally was over 10%, the most significant gain in six months.
However, it won’t surprise many if this turns out to be a short-lived rally.
There isn’t any change in the current macroeconomic environment, and investors are generally still wary of the impending high inflation and recession fears.
Jerome Powell reiterated the Fed's hawkish stance during the Jackson Hole meeting.
On the other hand, however, Ethereum seems to be gaining traction as we move closer to the Merge. It was announced to happen in September 2022.
Conclusion
Safe to say, we are still unsure what the Merge's impact would be until after the event happened, especially in a hostile macroeconomic environment. For now, we can only wait and see.
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