Reuters Poll Indicates Huge Bitcoin Rally Ahead Despite 12% Drop

A Reuters poll indicates that Bitcoin will soon rally despite the recent drop by 12% which saw bitcoin going below $10,000 again. In our Bitcoin news today, we are reading more about the price analysis.

The past two days found Bitcoin in a bearish state as the cryptocurrency experienced a massive sell-off on Wednesday that continued until the next session. The BTC/USD pair lost 12% of the value and fell from $11,950 to $10,000. The downside sentiment raised worries about the extended drop with many analysts predicting $9,600 level to be the next bearish target.

According to the Reuters poll, the cryptocurrency will soon rise, despite its dive that was coincided with a similar move on the traditional markets. The US stocks fell on Thursday with Nasdaq Composite Index dropping 5% which is the most significant daily decline since June 11. Gold also dropped by 3.11% but one asset traded higher than all of these, the US Dollar. The greenback benchmark index which measures it against foreign currencies increased from its two years low and the rebound added 1.15% of the strength.

It seems that the day traders moved into the US dollar after the recent growth as the country’s manufacturing data shows massive improvements and the weekly adjusted unemployment benefits claims also dropped. Traders took it as their shot to sell the profitable positions so the capital moved right back to the US dollar strengthening it even more along the lines. The short-term rebound in the US dollar market didn’t really extend itself for the bigger timeframe at least not according to the latest Reuters poll on the fiat currency.

The media platform polled 75 strategists on the US dollar and its forward outlook for 2021. Most of them said that they are expecting the greenback to extend its decline as long as the Federal Reserve manages to maintain the benchmark lending rates close to zero. The US central bank approach to higher inflation could also increase the downside risk:

 “The Fed’s policy actions have driven the main reason why the dollar has weakened so sharply over the last four or five months,” Lee Hardman, currency economist at MUFG. So they’ve basically slashed rates to zero, that yield differential in America over the rest of the world is compressed and that obviously helped keep the dollar at such strong levels in previous years, which is no longer the case.”

On the other hand, scarce assets such as Bitcoin and gold are the main opponents to the US dollar. Investors hedge into these safe-haven assets because the can lose their savings thanks to the rising consumer price index.