The crypto rally that began in early October now appears to have petered out as the US dollar strengthens and investors move capital back into stocks.
The price of Bitcoin (BTC), the largest cryptocurrency by market capitalization, fell to US$60,900 after trading above US$65,000 at the beginning of the month.
Ethereum (ETH) price has also fallen by 3% in the past 24 hours after rising in early October, trading at just under USD 2,400. Smaller cryptocurrencies are also in retreat.
Analysts attribute the decline in crypto prices to the strength of the U.S. dollar and the shift of retail investors into stocks.
The dollar index, which measures the dollar’s exchange rate against other major currencies, is currently at 102.97, the highest level since August 16 of this year.
The U.S. dollar has been steadily rising since the Federal Reserve cut interest rates by 50 basis points on Sept. 18 following the explosion in jobs data a week ago.
At the same time, trading in microchip and semiconductor stocks has reignited, with Nvidia (NVDA), Broadcom (AVGO), and Advanced Micro Devices (AMD) each up more than 20% since mid-September.
Despite the current pullback, many analysts still expect the crypto sector to recover towards the end of the year, with some predicting it will reach new all-time highs in the coming months.
