Bitcoin’s price increased to $87,500, reaching a one-month high after comments from Trump about potentially firing Fed Chair Powell, which weakened the dollar to a three-year low. Analysts foresee further gains, possibly up to $200,000, despite indications of overbought conditions. The current trading environment is influenced by exchange netflow trends, retail participation, and broader economic factors including tariff negotiations.
Bitcoin (BTC) has surged to $87,500, marking its highest value in almost a month, attributed to the declining U.S. dollar. This price hike followed comments from President Donald Trump regarding the potential dismissal of Federal Reserve Chair Jerome Powell, raising concerns regarding monetary policy independence. Consequently, the dollar index fell to a three-year low, prompting investors to look towards alternative assets such as Bitcoin to safeguard their purchasing power.
The recent trading surge saw Bitcoin climb 3.2% on Monday to a price of $87,518, recovering losses incurred since the announcement of reciprocal tariffs by Trump earlier in April. Prior to this price movement, Bitcoin traded in a stable bracket between $84,000 and $85,000, indicating a solid resistance level was finally breached, which many analysts observed as bullish.
Analysts noted a shift in sentiment with some suggesting that Bitcoin needs to surpass the level of $88,804 to end the trend of lower highs and lows. Scott Melker, a crypto analyst, highlighted the importance of this movement, identifying a breakthrough in previously established descending resistance levels, instilling optimism amongst followers about the cryptocurrency’s potential trajectory.
The interplay between Bitcoin’s rise and the weakening dollar points to a broader trend whereby investors gravitate towards cryptocurrencies as an inflation hedge when fiat currencies falter. Alongside Bitcoin, gold also reached record highs, indicative of a growing appetite for alternative stores of value in light of economic uncertainties.
From a technical viewpoint, Bitcoin’s exchange netflow has seen a negative trend recently, reflecting a movement from exchanges toward self-custody solutions. This transition is perceived positively, as it indicates decreased selling pressure which may underpin price increases. Furthermore, retail activity trends are under scrutiny, where significant price peaks in the past were observed coinciding with spikes in retail participation.
Despite optimistic forecasts predicting Bitcoin could soar to $200,000, analysts caution that the current Relative Strength Index (RSI) at 73 signals potential overbought conditions. The RSI, which gauges the speed of price changes, suggests a possible correction could ensue, reflecting the necessity for caution amidst bullish projections.
Additional supportive factors for Bitcoin included signs of potential trade negotiations with major U.S. trading partners. Trump’s recent engagement with Japanese trade representatives appears to foster optimism about tariff resolutions, while there are hints of openness to dialogue with China. Such geopolitical reassurances may contribute favourably to Bitcoin’s status as a hedge against political instability, amplifying its appeal in the financial arena.
