The crypto market is at a critical juncture, considering both technical signals and geopolitical factors shaping its future.
The Mechanics of Dollar Policy
Dollar dominance is based on the fact that nearly all global transactions denominated in dollars go through New York. This gives the U.S. unique leverage for imposing sanctions and freezing assets. The very strength of this system also serves as its weakness: if reserve managers and corporations start doubting the safety of their dollar assets, the process of diversification may accelerate.
Technical Analysis of the Crypto Market
Currently, the total market capitalization of the crypto market stands at $3.83 trillion, with prices stabilizing between $3.74 trillion and $4.04 trillion. Resistance is set around the $4 trillion mark, while support is identified at $3.7 trillion. If the market closes above $3.9 trillion on volume, it confirms a bullish continuation phase.
Prospects for Crypto Assets
As central banks increasingly diversify their assets, crypto assets may play a vital role in this transition. Unlike gold and yuan, which have limitations in liquidity and settlement speed, Bitcoin offers an instantaneous, uncensorable means of settlement globally.
The U.S. dollar policy aims to strengthen the country's economic influence; however, its excessive application may aid in the rise of alternative financial systems, including cryptocurrencies. The crypto market is very near the tipping point, and changes in political and economic conditions could provide a safe haven for both retail and institutional investors.
