Bitcoin up 0.95% after ECB rate cut

The leading cryptocurrency surpasses $104,000 as investors seek protection from global political and economic uncertainty. Is it approaching new all-time highs?

Bitcoin closed Thursday up 0.95% to $104,722 after the European Central Bank (ECB) rate cut and the dollar's weakness due to disappointing economic data in the US. The cryptocurrency is emerging as a safe haven asset amid trade and political tensions, as investors accumulate BTC through institutional ETFs.

Bitcoin continues to trade above key 25-, 50- and 200-period moving averages, confirming a short-, medium- and long-term bullish trend / TradingView

Bitcoin as a safe haven in times of uncertainty

In a context of global volatility, bitcoin demonstrated its resilience this Thursday, rising 0.95% to close at $104,722. The cryptocurrency reached an intraday high of $106,457, although it retreated after President Donald Trump's comments on tariffs on Mexico and Canada. This move suggests that investors are using bitcoin as a safe haven asset, similar to gold, amid political and economic uncertainty.

Dollar weakness and ECB rate cuts boost bitcoin

The dollar showed weakness after the publication of disappointing economic data in the US. GDP grew 2.3%, below the 2.6% expected, while the GDP price index registered 2.2%, lower than the 2.5% expected. These data, combined with the ECB rate cut by 25 basis points, gave bitcoin a boost. The ECB left the door open for more cuts, which could further benefit cryptocurrencies.

Trade tensions and tariffs: Inflationary risk

Trump's trade policy continues to generate uncertainty. Mexico announced that it would apply 19% tariffs to China, while the US threatens to impose tariffs as of February 1. These measures could have inflationary effects, forcing central banks to maintain or raise interest rates. A higher rate scenario could weaken cryptocurrencies, but for now, Bitcoin appears to be gaining traction as a safe haven.

Institutional Investment in Bitcoin Continues to Rise

Despite a slowdown in net capital flows into Bitcoin ETFs, assets under management rose to 1.17 million BTC. On Thursday, net inflows were $23.30 million, a modest figure compared to $92 million on Wednesday. However, open interest in Bitcoin rose 1.20%, reaching $65.16 billion, indicating that liquidity continues to flow into the market.

BTC Dominance and Crypto Market Outlook

Bitcoin maintains its leadership in the sector with a dominance of 58%, followed by Ethereum with 11% and altcoins with 30.8%. The total crypto market capitalization reached $3.57 trillion, with a trading volume of $108.3 billion. The fear and greed index stood at 54 points, in a neutral zone, while the alternative cryptocurrency index stood at 46 out of 100 points, slightly favoring bitcoin.

BTC in key zone

Bitcoin continues to trade above the key 25, 50 and 200-period moving averages, confirming a short, medium and long-term bullish trend. However, the price faces critical resistance at $109,500, a level at which it was rejected twice: on December 17 and January 20. The latest rejection occurred with a high trading volume, which raised doubts among investors about Bitcoin's ability to reach new all-time highs.

BTC is consolidating itself as a safe haven asset amid global uncertainty, supported by the weakness of the dollar and the expansive monetary policies of central banks. However, trade tensions and inflationary risk could limit its advance in the short term. With key resistance at $109,500, investors are keeping an eye on the market's next moves.

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 with a professional before making any financial decisions.