Bitcoin Soars as U.S. Dollar Weakens Amidst Political Uncertainty

Bitcoin’s value has surged to approximately $87,375 amidst a weakening U.S. dollar, driven by concerns over political influence on monetary policy and rising geopolitical instability. President Trump’s criticisms of the Federal Reserve have increased market volatility, coupled with fears of trade conflicts. On-chain data shows new investors are profiting while short-term holders face losses. Technical analysis indicates a breakout from a falling wedge pattern, with potential targets suggesting an 18.50% rise by May.

Bitcoin has experienced a rally, reaching around $87,375, coinciding with a drop in the U.S. dollar to its lowest level since late 2023. This decline is attributed to burgeoning concerns over political influence on monetary policy amidst rising geopolitical tensions. Market volatility has been further intensified by President Trump’s renewed critiques of the Federal Reserve, including speculation about potential leadership changes at the Fed.

Investor apprehension is compounded by Trump’s threats of renewed tariffs, stoking fears of a fresh global trade conflict. Consequently, there has been a noticeable capital flight from U.S. equities and bonds as investors seek alternatives. Bitcoin’s technical indicators suggest a positive shift, with its Relative Strength Index (RSI) surpassing 57, indicating increasing momentum.

On-chain data from CryptoQuant reveals that new investors, those holding Bitcoin for less than one month, are seeing an average gain of +3.7%, signalling a resurgence of confidence in the asset. However, Short-Term Holders (STH) remain at a loss, with an average decline of -5.1%. This group has a realized price near $91,000, a critical resistance level.

Analysts from CryptoQuant suggest that a break above $91,000 could reinstate profitability for short-term holders, potentially alleviating sell pressure. Recently, Bitcoin has entered a breakout phase from a falling wedge pattern, which has historically limited its price advancement since January. This formation is characterised by a price decline within two descending and converging trendlines.

When Bitcoin breaks above the upper trendline of a falling wedge, it typically targets a rise equivalent to the height of the wedge. For Bitcoin, this analysis predicts an upside target around $103,000, suggesting a potential rally exceeding 18.50% by May.

Yashu Gola, a crypto journalist and analyst, provides comprehensive market analyses and insights on digital assets and macroeconomic trends, bridging the gap between traditional finance and cryptocurrency. He emphasises understanding behavioural finance in relation to memecoin trends as part of his expertise in the sector.