Bitcoin closes higher at $87,281 due to dollar weakness

The world's leading cryptocurrency breaks above the EMA200 and maintains its long-term bullish trend, while the dollar falls in the face of Trump's tariffs.

The price of bitcoin closed with a slight gain of 1.23%, reaching $87,281, after a day marked by volatility. The cryptocurrency touched a low of $81,500 before rebounding, staying above the 200-period exponential moving average (EMA200), reinforcing the long-term bullish sentiment. The fall of the dollar, which lost 0.94% on its DXY index, and global trade tensions boosted the rally in bitcoin.

The cryptocurrency closed above the EMA200, located at USD 85,740, suggesting a long-term bullish sentiment. / Tradingview

The dollar falls and bitcoin benefits

The US dollar weakened after the responses of Mexico, Canada and China to the tariffs imposed by President Donald Trump. These countries announced reciprocal measures, creating uncertainty in traditional markets. The S&P500 index fell 1.22%, hitting four-month lows.

In Europe, the euro rose to three-month highs, boosted by proposals from Germany to create a €500 billion fund for infrastructure and defense. This strengthening of the euro contributed to the fall of the dollar, which has historically benefited assets such as bitcoin.

Bitcoin maintains key support

Despite a bearish start to the day, bitcoin managed to recover and reach a high of USD 88,967. The cryptocurrency closed above the EMA200, located at USD 85,740, suggesting a long-term bullish sentiment. However, the price is still trading below the EMA100, which acts as resistance in the USD 93,000 area.

Trading volume nearly doubled the 25-day average, indicating strong buyer participation. Additionally, the formation of a candle with a long lower wick suggests that sellers failed to maintain control of the market.

Fear and Greed: Opportunity for Buyers

CoinMarketCap's Fear and Greed Index stands at 25 points, indicating that the cryptocurrency market is in a fear zone. Historically, these conditions have been exploited by investors to buy assets at prices considered low.

On the other hand, the Altcoin Season Index stands at 15 points, suggesting that Bitcoin is outperforming 75% of alternative cryptocurrencies in performance over the past 90 days. Although Bitcoin is recording losses of 12.03% over the past few days, these are smaller compared to altcoins such as WIF, which fell by 81.87%.

Dominance and Open Interest: Bitcoin Leads the Market

Bitcoin dominance remains at 60.3%, while Ethereum accounts for 9.1% and the rest of the altcoins add up to 30.5%.

However, open interest in bitcoin futures fell 4.23% in the last 24 hours, standing at $47.34 billion. This decline reflects a deleveraging process that began on January 21, when President Trump did not announce the creation of a bitcoin reserve during his inauguration, disappointing the market.

Where is bitcoin going?

Bitcoin demonstrated resilience by maintaining its key support at the EMA200, while the dollar faces pressure from global trade tensions. Although bearish sentiment persists in the medium term, bitcoin's strength against altcoins and its ability to break through critical levels suggest that investors could be preparing for a new bullish push.

Disclaimer: The information provided in this article is for informational purposes only and does not constitute financial, investment or legal advice. Please do your research and consult a professional before making any financial decisions.