Bitcoin’s price surged above $88,000 following a decline in the U.S. dollar, driven by political tensions surrounding Federal Reserve Chair Jerome Powell. Over $97 million in Bitcoin shorts were liquidated, contributing to total liquidations near $180 million across cryptocurrencies. While traditional financial markets suffered losses, Bitcoin’s rise indicates a potential shift toward it as a protective asset amid volatility in equities and economic instability.
Bitcoin surged above $88,000 on Monday, eventually stabilising around $86,800, marking a peak not seen since late March. This increase occurred concurrently with a notable decline in the U.S. dollar, which dropped to a three-year low due to rising concerns over potential political interference with the Federal Reserve. Data from CoinGlass revealed that over $97 million in Bitcoin short positions were liquidated within 24 hours, contributing to total cryptocurrency liquidations nearing $180 million, with Ethereum shorts accounting for over $26 million.
The U.S. dollar’s downturn was precipitated by intensified criticism from President Donald Trump towards Federal Reserve Chair Jerome Powell, as he reiterated calls for Powell’s dismissal through a post on Truth Social. Following these comments, the White House’s economic advisor, Kevin Hassett, confirmed that discussions were underway to explore the legality of Powell’s removal. This uncertainty led to a decline in the U.S. Dollar Index by over 1%, hitting levels last seen in March 2022.
In traditional markets, indices such as the Dow Jones, S&P 500, and Nasdaq experienced declines of around 3% on Monday morning, reflecting investor concerns regarding the independence of the Federal Reserve and broader economic instability. Despite these pressures, Bitcoin’s price elevation indicates investors may be seeking safer assets amidst geopolitical and economic tumult, paralleling the increasing value of gold, which also surpassed $3,420 per ounce.
Ethereum maintained a stable value around $1,624, having fallen more than 20% over the past month. Other cryptocurrencies showed mixed performance: Dogecoin increased approximately 1.9%, XRP gained 0.15%, MATIC rose nearly 5%, while Solana saw a slight dip. Additionally, the TRUMP token noted gains exceeding 2%.
Factors influencing Bitcoin’s recent price surge included advancements in U.S. trade discussions; Trump claimed significant progress had been made with Japan, and there were indications that China might resume trade negotiations under more respectful terms. Earlier tariff announcements from Trump contributed to the initial market anxiety.
The recent spike in Bitcoin and gold prices underscores investor hesitation and a move away from the U.S. dollar in response to ongoing political and economic uncertainties.
