US Dollar has been Key Driver of Solid Bitcoin (BTC) Performance in 2020, According to Binance

 

Binance, the world’s largest digital asset exchange, notes that cryptocurrency markets took a major hit in September 2020 as Bitcoin (BTC) and Ethereum (ETH) recorded their first down month since June of this year.

Binance also mentioned in its monthly report that despite the overall weakness in the larger crypto-asset market, traders may have had opportunities to generate substantial gains. For instance, the UNI token from Uniswap gained over 1000% just during its first trading day on Binance’s spot market. Binance believes that this helped create “a positive spillover effect on UNI’s futures contracts.”

Last month, Binance Futures handled over $176 billion in trading volume amid a (mostly) flat trading period for most of the month, the exchange revealed.

Binance noted in its crypto market report:

“As Bitcoin’s volatility fell to a new one-month low, altcoin contracts have driven most of the open interest growth. The US Dollar has been a key driver of Bitcoin’s success this year. A continuation of the Dollar’s relentless selling will trigger the next wave of buying in alternative assets such as Bitcoin.”

The report added:

“The pullback across crypto markets coincided with retracements in global equity markets and Gold. In the same period, the US dollar recovered from its prolonged decline as concerns rose about slowing economic growth, increasing infections of Covid-19 in Europe, confusion about US stimulus, and upcoming elections. With so much uncertainty surrounding the global economy and a resurging pandemic, investors have turned their attention towards the greenback.”

Binance claims that many traders and investors seem to not be too concerned about the recent market downturn as on-chain indicators suggest a relatively “positive trend in the midterm.” The exchange’s report also mentions that no bull market actually “goes up in a straight line.” The report further notes that market corrections occur at regular intervals, even during bull markets.

The Binance team adds that market corrections may be healthy because they can help with adjusting overvalued prices of assets and can also offer better buying opportunities.

Going on to comment on the decentralized finance (DeFi) space, the report pointed out that the Total Value Locked (TVL) in the nascent sector has now recovered and grown further, following the huge sell-off in early September 2020.

Uniswap has consistently accounted for the most value locked in DeFi protocols at around $2 billion, the report confirmed. It added that Maker has also remained a leading protocol and DeFi platform with around $1.9 billion in TVL. Meanwhile, Aave has accounted for a substantial $1.5 billion, and Curve Finance recently had more than $1.2 billion worth of assets locked.

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