Bitcoin Surpasses $87K Amidst Rising Institutional Demand and Dollar Weakness

Bitcoin’s price has exceeded $87,000 in a recent rally driven by macroeconomic uncertainty and institutional demand. Key factors contributing to this trend include a weaker U.S. dollar, substantial institutional inflows, a bullish technical breakout, and the designation of Bitcoin as a strategic asset. Analysts are targeting $90,000 as the next resistance level, but various risks persist in the market.

Bitcoin has surged past the $87,000 mark as of early Monday, continuing its late-week rally, which analysts attribute to macroeconomic uncertainties, a weakening dollar, and increasing institutional interest in digital currencies. This recent gain of over 7% within 48 hours marks Bitcoin’s highest price since late March and indicates its potential to reach new all-time highs by 2025.

Several factors are propelling Bitcoin’s price increase:

– Weaker U.S. Dollar: The dollar index fell significantly following President Trump’s critical remarks about the Federal Reserve, raising concerns over monetary policy stability. This situation has led investors to seek inflation hedges like Bitcoin and gold, while the Japanese yen escalated to a seven-month peak against the dollar.

– Institutional Inflows and ETF Demand: Spot Bitcoin ETFs experienced over $230 million in net inflows last week, with Metaplanet, a Japanese firm, acquiring an additional 330 BTC, thereby increasing its total to nearly 5,000 BTC. Such institutional interest helps reduce market volatility and enhances confidence among investors.

– Bullish Technical Breakout: Bitcoin’s price has broken through a crucial resistance area of $85,000 to $86,300. A potential “golden cross” on the daily chart, where the 50-day moving average surpasses the 200-day, often signals favourable conditions for long-term investors.

– Bitcoin as a Strategic Asset: The Trump administration’s proposal for a U.S. Strategic Bitcoin Reserve adds momentum to Bitcoin’s perception as a vital economic asset. Although still nascent, this approach is considered a significant move towards mainstream acceptance of cryptocurrencies.

Looking forward, analysts are eyeing the psychological barrier of $90,000 as the next immediate target. Successfully surpassing this level with strong volume could propel prices even higher towards $92,000. However, numerous risks persist, particularly concerning shifts in macroeconomic factors or Federal Reserve policies that may disrupt Bitcoin’s upward trajectory.

Ava Greene, a senior digital strategist at Argo Capital, expressed that Bitcoin’s current trading pattern resembles that of a macro asset, influenced by dollar weakness, ETF inflows, and international volatility, thereby attracting a new class of investors.

As of 10:45 a.m. ET, Bitcoin’s statistics are:
– Price: $87,104
– 24h Change: +3.26%
– Market Cap: $1.71 trillion
– Dominance: 54.6%
– Volume (24h): $41.3 billion

For American investors, Bitcoin’s recent rally raises concerns about potential buying opportunities amid the 2025 tax season and ongoing inflation worries. While financial advisors suggest a cautious approach, they acknowledge Bitcoin’s resilience as an asset class. Wealth advisor Marcus Patel remarked that Bitcoin’s position in long-term portfolios is becoming increasingly credible, though understanding its risk profile remains essential.