Will USD Devaluation Hedge the $SPX Fueled Drop in Bitcoin Prices?

By Nivesh Rustgi
Published August 19, 2020 Updated August 19, 2020
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Will USD Devaluation Hedge the $SPX Fueled Drop in Bitcoin Prices?

By Nivesh Rustgi
Published August 19, 2020 Updated August 19, 2020

New highs in SPX seems to be acting as a catalyst for the drop in Bitcoin and gold. However, the devaluation of the US Dollar might build bullish fundamentals. 


The stock market opening on Tuesday was quite eventful as asset prices across commodity, currency and crypto markets moved drastically.

The new ATH in $SPX midst the COVID-19 economic slow-down is surprising in itself. But that discussion needs to visit the economic scenario of the world with the rising debt and unemployment countering a high volume of quantitative easy providing liquidity during the apparent recovery from the collapse.

A confirmed break above ATH in SPX will open room for price discovery and a new bullish phase altogether. The time for Bitcoin investors to regret breaking correlation with the stock markets might be approaching fast. Gold records a slight pullback to $1975 per oz. at the opening of the stock market on Tuesday in the US. However, seems to be recovering fast above the $2000 per/ounce level.

US Dollar Devaluation: USD Now At Lowest In 2 years

On the other hand, while SPX index is making new highs, the US Dollar index is breaking below its support, which is a positive fundamental signal for the rise in Gold and Bitcoin. Mati Greenspan, crypto analyst and founder of Quantum Economics tweeted,

US Dollar just broke support. It’s now at the lowest levels in 2 years.

us dollar devaluation
US Dollar Currency Index (Source: Tweet)

On the technical front, Bitcoin [BTC] has dropped below $11,900 and bulls will be looking to support the range above $11,500-$11,650.

btcusd bitstamp
BTC/USD 4-Hour on Bitstamp (TradingView)

However, there is considerable volatility in all assets at the moment. Josh Rager, a crypto trader and market analyst noted,

There will be many dips on the way to the top Zoom out, see the big picture and remain steadfast

Do you think gold and Bitcoin will hold above support or bulls will give in for the stock market gains? Please share your views with us. 

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
About Author
Nivesh Rustgi
1181 Articles
Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com

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