The Ghost of the stock market crash is back again. It is haunting Bitcoin. It happened in the March of 2020. But then the prospect of a fast-spreading coronavirus pandemic led to lockdowns. Moreover, there are several lockdowns across developed and emerging economies.
Corona Lockdowns
This showed a significant effect on the global stock crash in tandem, and Bitcoin lost half of its value in just two days. The US dollar index represents the greenbacks strength against a basket of top foreign currencies. Currently, the value has climbed to the highest level since January 2017.
Bitcoin Holdings
This huge inverse correlation shows that investors dumped their stocks and Bitcoin holdings. Moreover, they are seeking safety in a way that they thought was better haven the greenback. Thus, after almost a year, Bitcoin and stock markets again wrestle with a similar bearish sentiment.
Renewed Demand
This time it is led by a renewed demand for the US dollar following the Federal Reserve’s hawkish tone. The US Central Bank announced on Wednesday. The bank said that it would start hiking its benchmark interest rates by the end of 2023, a year earlier than planned.
Interest Rates
The lower interest rates helped pull the Bitcoin and US stock market out of their bearish slumber.
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