Bitcoin Rebounds on Dollar Weakness

The weak dollar and Japanese rate hike expectations boost Bitcoin to $98,305 as the crypto market looks for opportunities.

Bitcoin recorded its second consecutive day of gains, closing at $98,305 with an increase of 1.72%. This rally was driven by a weak dollar, which fell against the yen due to the Bank of Japan's rate hike expectations. In addition, former President Donald Trump's tariff narrative loses steam, generating optimism in the markets.

Bitcoin recorded its second consecutive day of gains, closing at $98,305 with an increase of 1.72%. / Tradingview

The Weak Dollar: A Boost for Bitcoin

The DXY index, which measures the strength of the dollar against a basket of currencies, fell -0.69%, settling at 106.42 points. This drop pierced a key dynamic support at the EMA100 (106.60 points), sending a bearish signal for the US currency. A weak dollar historically benefits Bitcoin and other cryptocurrencies as investors seek refuge in alternative assets.

Key factors behind the rally

Japan rate hike expectations: The yen strengthened on bets of a rate hike by the Bank of Japan, which weakened the dollar further.

Labor market data: US jobless claims rose to 219,000, above expectations of 215,000, which also pressured the dollar.

Dynamic resistance overcome: Bitcoin tested and held its position above the EMA50 ($97,800), a key resistance that now acts as support.

Opportunities in the crypto market

Coinmarketcap's Fear and Greed Index stands at 40 points (neutral), suggesting that the market could be sending signals of opportunity to investors. However, Bitcoin trading volume (17,160 BTC) remains below the 25-day average (24,050 BTC), signaling caution.

Bitcoin is at a crucial juncture, with a weak dollar and macroeconomic factors that could drive its price. However, investors should remain alert to potential selling pressure, reflected in the rising Bitcoin balance on exchanges (+3,322 BTC) and negative net flow from ETFs ($-64.10 million).

Disclaimer: This content is informative and does not constitute financial advice. Cryptocurrencies are highly volatile; invest responsibly.