Good US economic data, a strong dollar and possible Slik Road selloff push Bitcoin back down

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Last Updated on 9 January 2025 by CryptoTips.eu

As predicted earlier this week, the strong US economy caused Bitcoin’s price to fall again. That sounds very strange in itself, but it makes sense. As the United States is still improving economically, the Federal Reserve now has less of a reason to lower interest rates quickly (bad news for Bitcoin, which is still seen as a risky investment, and will thus attract less new institutional investors).

Today it was also announced that the US government (DOJ) has given green light for the sale of 69,370 BTC that was seized from Silk Road. Although it is not yet certain that this will actually be sold, it is causing tension in the Bitcoin market.

Also due to the difference with other major economies, the dollar is becoming increasingly stronger (bad news for Bitcoin, as investors are more likely to invest in dollars than in crypto). Bitcoin is trading for $94,300 at the time of writing.

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Dollar

The DXY or dollar Index is an indicator that measures the value of the US dollar against a basket of six major currencies, such as the euro, the yen or the British pound. In other words, it is a kind of “thermometer” for the strength of the dollar in global markets. When the DXY rises, it means the dollar is strengthening against these other global currencies, which can have significant implications for the financial markets as a lot of commodities are quoted in dollars.

For example, a strong dollar makes dollar-denominated assets such as Bitcoin more expensive for international investors. This dampens demand for Bitcoins and puts downward pressure on the price.

Donald Trump reacted to the new economic data during his usual press briefing, declaring that “interest rates are far too high,” reigniting discussions about the future of US monetary policy.

As we said last month, if Jay Powell (Fed Chairman) does not lower interest rates soon, Trump may just find a way to replace him.

Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / [email protected]
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