On Tuesday (September 27), as the U.S. Dollar Index (DXY) went above 114 for the second time this week, it once again brought intense sell pressure on risk-on assets such as crypto and stocks.
Wikipedia says the U.S. Dollar Index” (DXY)—designed, maintained, and published by ICE (Intercontinental Exchange, Inc.)—is an index (or measure) of the value of the United States dollar relative to a basket of foreign currencies. These other currencies are EUR, GBP, JPY, CAD, SEK, and CHF.
Per data by MarketWatch, over the past seven-day period, DXY has gone from 110.20 to 114.32, which is an increase of 3.73%. On September 25, DXY hit 114.51, which is the highest it has been since April 2002. Around 7:45 a.m. UTC, when DXY was around 113.53, it started its latest rally, breaking above 114 by around 4:00 pm UTC. Naturally, this was bad news for both crypto and stock markets.
According to data by TradingView, on crypto exchange Bitstamp, although Bitcoin was trading above the $20K in the early hours of today, as DXY kept climbing, the $BTC price kept dropping. Currently (as of 6:34 p.m. UTC), BTC-USD is trading around $18,966.
As for the U.S. stock market, earlier today, the S&P 500 fell to its lowest level this year. However, in the past few minutes, DXY has given back some of its gains (it is 114.16 as of 6:42 p.m. UTC), which has helped the S&P 500 to move into green territory. The Dow Jones Industrial Average, though, which had fallen as much as 0.75% earlier today, has recovered somewhat, currently (as of 6:49 p.m. UTC) down only 0.07%.
eToro crypto consultant Glen Goodman said during an appearance on CoinDesk TV’s “First Mover” earlier today:
“There are no safe havens… We’ve got a situation where as much money in the world as possible is going into dollars.“
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