Bitcoin has surpassed the $118,000 mark, writes UNN with reference to CoinDesk.
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On Thursday, Bitcoin reached an all-time high and is now above $117,000, but the largest cryptocurrency by market capitalization remains below previous records set against gold, basic stock indexes, and the British pound.
This is because the recent rally largely reflects the weakness of the dollar, rather than any general catalyst for cryptocurrencies. The DXY index, which reflects the exchange rate of the American currency against a basket of currencies of trading partners, fell from 110 at the beginning of the year to below 98. Values below 100 usually signal dollar weakness, which generally contributes to the growth of risky assets.
For Bitcoin to demonstrate true independent strength, it must outperform other assets, and this is not happening now, the publication notes.
For example, one BTC at the time of writing was worth slightly more than 35 ounces of gold, while the all-time high in December 2024 was about 40 ounces. Similarly, Bitcoin is trading at £87,000 (US$117,800), while the all-time high is £90,000. As for stocks, the ratio of Bitcoin to the S&P 500 and Nasdaq 100 indexes also remains below all-time highs, the publication notes.
These levels, as noted, are long-term resistance zones. Once Bitcoin decisively breaks through these limits, true price discovery may begin, the publication indicates. Without considering Bitcoin in comparison to other major assets, besides the dollar, as noted, it is difficult to assess the real dynamics.