The recent weakening of the dollar is fueling the bullish streak of bitcoin.
This Friday, the price of bitcoin traded higher, closing at USD 104,870, after a 0.60% drop in the dollar on its DXY index, marking a five-week low. The decision of the new US president, Donald Trump, not to implement tariffs against China generated economic uncertainty. This caused a further drop in the dollar's price against other currencies, including the main cryptocurrency.
This Friday, the price of bitcoin traded higher, closing at USD 104,870, after a 0.60% drop in the dollar on its DXY index, which marks a five-week low / Tradingview
A volatile price on the horizon
Bitcoin, which reached a high of USD 107,120 and a low of USD 102,750, showed high levels of volatility. This trend comes after Trump failed to fulfill his promises of tariffs. This lowered inflation expectations in the US economy and could therefore facilitate future interest rate cuts by the Federal Reserve (Fed).
In four days, the Fed's new interest rates will be announced, with a 99.5% chance that it will maintain the current 4.50%.
The recent drop in the two-year Treasury bond yield, which is down to 4.26%, indicates a change in the financial landscape that benefits cryptocurrencies.
Bitcoin Outflow and ETF Accumulation
Globally, centralized exchange wallet balances continue to decline. Currently, there are 2.17 million BTC on cryptocurrency exchanges, marking an outflow of 91,388.08 BTC over the past 30 days. Bitfinex is the exchange with the largest withdrawal, with 28,455.56 BTC, followed by Coinbase Pro with 26,766.41 BTC.
In contrast, the situation in bitcoin exchange-traded funds (ETFs) is positive, with a recent inflow of over $1.2 billion during the week. This pushed the ETF market capitalization to a new record of $125.07 trillion. Last Thursday saw a trading volume of $10.09 trillion, the second highest since its launch.
Market Open Interest Changes
Options market open interest shows a clear bias towards optimism: 64.46% are call options, while 35.54% are put options. This suggests that investors are still betting on the bitcoin price to continue its rise, reflecting a sharp increase in options open interest to $39.95 trillion.
Bitcoin remains in an uptrend since October 2024, trading above its EMA25 and EMA50 moving averages. However, it faces a resistance zone around $108,000, where liquidations have occurred since December following the announcement of new rates.
The bullish dominance remains, and many investors believe that bitcoin could attempt to reach new all-time highs amid speculation about the new US president's economic decisions.
Crypto and the future of finance
With bitcoin showing signs of strength against a weakened dollar, the crypto community is closely watching the market's next moves. The intersection between politics and the digital economy could mark the beginning of a new era for cryptocurrencies.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investing in cryptocurrencies involves risks and it is advisable to consult with a financial professional before making investments.
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