Cryptocurrencies decline amid strengthening dollar
Leading cryptocurrencies, including Bitcoin, Ethereum, and Solana, ended the trading week in the red. According to analytical firm Glassnode, 43% of the Bitcoin supply is currently in a state of loss.
The decline in the value of crypto assets occurred against the backdrop of a rise in the US dollar index, which showed the sharpest weekly gain in the last 12 months. The strengthening of the US dollar negatively affects cryptocurrency prices, as they are denominated in US dollars.
Experts attribute the rise of the dollar to expectations of an interest rate hike by the US Federal Reserve (Fed) in the near future to combat high inflation. Tightening of monetary policy, as a rule, puts pressure on risky assets, which include cryptocurrencies.
Despite the short-term decline, most analysts maintain a long-term optimistic outlook on the prospects of the cryptocurrency market. They believe that the influx of institutional investors and the further development of infrastructure will support the growth of cryptocurrency prices in the medium and long term.