bitcoin topped 20000 on tuesday hitting its highest level in the more than a week but is still struggling to break out of its tight trading range the worlds largest cryptocurrency was more than 7 higher at 2026595 at around 330 am et according to data from coindesk yearend rally hopes are starting to get dashed what history tells us about what comes next bitcoins rally lifted the broader cryptocurrency market ether was up around 7 at 138975 still bitcoin has struggled for direction trading between 18000 and 25000 since midjune after a crash saw nearly 2 trillion wiped off the entire crypto market since its peak in november that market decline was driven by interest rate rises from central banks aimed a controlling rampant inflation as well as a wave of bankruptcies and insolvency issues that filtered through the crypto industry crypto investors have been watching monetary policy because digital currencies have been closely correlated to us stock markets this year higher interest rates have put pressure on the sp 500 and techheavy nasdaq which has filtered through other risky assets including cryptocurrencies the us federal reserves 075 percentage point rate hike last week marked a major event for crypto markets according to vijay ayyar vice president of corporate development and international at crypto exchange luno this was broadly in line with market expectations and hence weve seen a lot of that sentiment priced in ayyar said interestingly bitcoins rally which began on monday happened despite a fall in us stocks with the sp 500 closing at its lowest level of 2022 stock futures rose on tuesday so there are signs that perhaps the correlation between crypto and stocks could be weakening meanwhile investors are watching the us dollar closely the dollar index which tracks the greenback against a basket of currencies is up more than 18 this year bitcoin moves inversely to the dollar so a strong greenback is negative for bitcoin however ayyar said that the dollar index could be nearing its top which would mark a potential bottom for bitcoin that could be a reason behind bitcoins surge traders hence might also be positioning themselves accordingly ayyar said since midjune when the crypto market set recent lows investors were focused on a massive network upgrade to the ethereum blockchain called the merge which changed the method of validating transactions on ethereum and significantly reduces the energy consumption in the run up to the upgrade which was completed on sept 15 the price of ether the native cryptocurrency of ethereum doubled far outpacing bitcoins gains in the period however ether has declined since the merge