Avalanche Rebounds From $29 Support - $38.40 Breakout Holds Key to Next Rally
Avalanche springs back from critical $29 foundation as bulls defend key support level.
The Make-or-Break Moment
All eyes fixate on the $38.40 resistance barrier - a decisive breakthrough here could ignite the next major upward trajectory. The cryptocurrency demonstrates remarkable resilience after testing the $29 low, showing strong buyer commitment at that psychological price floor.
Technical Tug-of-War
Traders witness an intense battle between accumulation and distribution patterns. The $38.40 level represents more than just a number - it's the gateway to reclaiming higher price discovery territory. Failure to conquer this resistance could trigger another test of the $29 support zone.
Market Psychology at Play
The bounce from $29 reveals underlying strength, but the real test begins now. Breaking $38.40 requires substantial volume and conviction - something traditional finance institutions still struggle to comprehend while they debate whether crypto is just a 'passing trend.'
Tariffs threaten dollar’s global strength
The study team included Tarek Hassan from Boston University, Thomas Mertens from the San Francisco Federal Reserve, and Wang from Renmin University of China. They found that tariffs hitting 26% WOULD be a breaking point where other currencies like the Euro could start challenging the USD’s central role in global business.
The current tariff levels under TRUMP average around 17 percent to 18 percent, the researchers estimate. They say these rates might make the dollar somewhat weaker but probably won’t destroy its dominant position entirely.
“The dollar emerges as the safest currency in the world because shocks that affect the United States MOVE a large share of global demand,” the researchers wrote. This drives need for USD when people want protection against currency swings and other financial risks.
They explained that this safety feature is what keeps United States interest rates low, draws global investment to America, and makes the USD the target for other countries trying to keep their exchange rates stable. “A sustained trade war would threaten this equilibrium,” they warned.
The research came out during this week’s Brookings economic conference. It arrives at a time when people are paying close focus to the dollar’s world role and how Trump’s policies might change it.
Market signals cast doubt on USD’s stability
This week’s New York Fed conference will also examine this issue. Meanwhile, investors are trying to figure out what conflicting economic data might mean for any changes ahead.
Recent USD declines could signal trouble. However, U.S. Treasury yields have fallen and stocks hit record highs, suggesting continued need for dollar-based investments and easing concerns about America losing global financial leadership.
However, the researchers cautioned that this strength can’t be assumed to last forever. They cited last spring’s market decline as an example.
“The fact that U.S. equities, Treasury bonds, and the dollar lost value at a time of disruption for international markets represents a stark departure from the usual pattern in which the dollar appreciates in times of global stress,” they wrote. This referred to the negative reaction when Trump first announced his trade tax plans in April.
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