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Bitcoin Price Depends on US Dollar Performance This Week

At the beginning of the trading day this week, Bitcoin wobbled, shifting between losses and gains on its weekly neutral outlook.

As of today, December 14, the cryptocurrency benchmark was traded at $19,115.54, down 0.27 percent in the European session. For starters, intraday losses emerged as part of a profit-taking move by day traders after a 7 percent Bitcoin rally over the weekend.

Due to a declining US dollar, Bitcoin’s losses seemed limited. The greenback also traded lower against the foreign currency basket, showing that the cash sentiment was not boosted by the vaccine news. Meanwhile the cryptocurrency also slipped as market attention turned to Pfizer-BioNTech’s Covid-19 vaccine approval in the US and the UK. A effective pandemic cure has increased expectations of a faster-than-expected economic rebound. As a result, both Asian and European stocks have opened up in positive territories. Early gains have also been registered on the US stock futures.

With the Federal Reserve expected to conclude its December policy meeting on Wednesday, followed by the announcement of US retail sales in November and the December US Market Manufacturing PMI Flash results, the week ahead poses challenges for the US dollar.

Analysts predict that against a haunting coronavirus outlook in the US, data will point to a decelerating economy. The Fed, meanwhile, would most likely keep its rates close to zero and its bond-buying policy unchanged, supplemented by predictions of unemployment and inflation. The bullish outlook of Bitcoin takes a lot of its impact from a poorer greenback’s prospects. As of now because of the vaccination reports, the cryptocurrency is gravitating towards bears. However after the momentum dies down, the attention of investors will shift to rising inflation estimates.

The hopes of the second coronavirus stimulus bill arrive with more optimistic calls for Bitcoin. Reuters announced that a bipartisan effort was introduced by the Democrats and the Republicans to implement a $908 billion relief package. If the package escalated, it would raise the bearish bias of the US dollar, which in turn, would move buyers to other safe-haven alternatives.

A pseudonymous trader reported that he expects Bitcoin to reach $20,000 considering the macroeconomic conditions surrounding it.

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