The cryptocurrency rally that began in early October now appears to have fizzled out as the U.S. dollar strengthens and investors move capital back into stocks.
The price of Bitcoin (BTC), the largest crypto by market capitalization, has declined to $60,900 U.S. after trading above $65,000 U.S. to start the month.
The price of Ethereum (ETH) has declined 3% in the past 24 hours to trade at just under $2,400 U.S. after also rallying at the beginning of October. Smaller cryptocurrencies are also in retreat.
Analysts say the pullback in crypto prices is due to a rising U.S. dollar and a shift into equities among retail investors.
The dollar index, which tracks the greenback's exchange rate against other major currencies, is currently at 102.97, its highest level since Aug. 16 of this year.
The U.S. dollar has been steadily rising ever since the Federal Reserve lowered interest rates by 50 basis-points on Sept. 18 and following a blowout jobs report a week ago.
At the same time, the trade in microchip and semiconductor stocks has been reignited, with the share prices of 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 cryptocurrency sector to rally into year’s end, with some forecasting new all-time highs in coming months.
