Bitcoin Tumbles Under $52,000, In Line With Beaten Tech Stocks & The Rejoicing Dollar
Bitcoin has reverted Wednesday’s gain yet again.
The report of Tesla starting to accept Bitcoin sent us above 57,000 only for the crypto asset to drop even lower to $51,500.
People are, however, taking this as an opportunity to buy the dip.
Zooming in from weekly to daily… oh yes. Today we have a new all-time-high in BTC leaving the exchanges for 2021. And a new dip buying prize to award. pic.twitter.com/Wb4CfMruKO
— Willy Woo (@woonomic) March 25, 2021
Bitcoin’s losses came following the beating taken by tech stocks. The S&P 500 fell by 1.3% this week and is in the loss by 2.1% since its March 17 all-time high. Nasdaq, meanwhile, is down 3.6% from Monday’s high and recording more than 8% losses since its mid-Feb peak.
Even Dow Jones Industrial Average has managed to tumble, down 1.8% from last Wednesday ATH.
Chinese tech stocks, Alibaba, Tencent, and Baidu, also dropped sharply or growing concerns of a possible delisting from US exchanges and reported plans of Beijing to take control of companies’ user data.
Hong Kong’s Hang Seng Tech index (HSTECH), which tracks shares in big Chinese tech groups, went down as much as 5%.
Waiting for Acceleration
The dollar, meanwhile, is enjoying gains as it hit a fresh four-month high against the Euro as the US pandemic response outpaces Europe’s, which continues to struggle with extended lockdowns and delayed vaccine rollouts.
“The narrative of the U.S. outperforming Europe in the coming quarter remains,” wrote Tapas Strickland, director of economics and markets at National Australian Bank, in a client note.
As for the benchmark 10-year Treasury yields, they are consolidating around 1.6% after hitting an over one-year top at 1.754% a week back, which is supporting the dollar and a big factor for the improvement in market sentiment.
“We’re in a little bit of a lull here. We know that the economy is primed to begin to really accelerate in the second quarter,” said David Kelly, chief global strategist at JPMorgan Asset Management. “But we haven’t seen that acceleration yet, so that’s what we’re waiting for.”
Not Enough Fear to Bottom
Federal Reserve Chair Jerome Powell and U.S. Treasury Secretary Janet Yellen expressed their confidence in the US recovery this week during their testimony to Congress. Powell said he thinks 2021 will be a “very, very strong year in the most likely case.”
While Powell said a coming round of post-pandemic price increases wouldn’t fuel persistent heightened inflation, Yellen defended the plans for future tax increases saying the American economy remains in crisis from the pandemic.
Interestingly, oil prices surged after one of the largest container ships got stuck in the Suez Canal.
However, all this bullishness about the prospects of recovery means there isn’t enough fear in the market to the bottom, according to David Yepez of Exencial Wealth Advisors.