As investors sold off dollar-denominated assets, Bitcoin and other cryptocurrencies surged significantly on Monday.
Market Turmoil and Bitcoin's Rally
Amid a broader market sell-off, Bitcoin defied the trend with a notable price increase. Former President Trump again criticized Federal Reserve Chair Jerome Powell, dubbing him "Mr. Too Late" and warning that without rate cuts, the economy could slip into recession. This sentiment exacerbated the sell-off in U.S. markets:
- Stock Decline: The Nasdaq Composite dropped nearly 4% intraday, while all three major U.S. indices fell over 2%.
- Bond and Dollar Weakness: Long-dated Treasury bonds faced heavy selling pressure, and the U.S. dollar index hit a three-year low.
Analysts observed that a softer dollar and macroeconomic uncertainty are driving demand for alternative assets like cryptocurrencies and gold.
Bitcoin's Price Movement
- Bitcoin rose over 4% to $88,300, its highest intraday level since April 3.
- Despite the rally, Bitcoin remains ~20% below its January all-time high of $110,000.
Larry Tentarelli, Chief Analyst at Blue Chip, noted:
Bitcoin is currently range-bound between $75K–$90K. A breakout above $90K could signal a major upward shift.
Why Cryptocurrencies Gained Amid Dollar Weakness
1. Dollar Index Collapse
The U.S. dollar index plummeted to ~98, a 16-month low, on track for its worst monthly performance since the 2009 Fed QE era.
2. Political Influence on Crypto
Trump’s threat to replace Powell with a "dovish" Fed chair could further support crypto assets:
- Analyst Brett Knoblauch: "Bitcoin and altcoins historically thrive in low-rate environments."
- Elon of Ultima Markets: "Fed easing may boost Bitcoin liquidity, as its price correlates with global M2 money supply growth."
FAQs
Q: Is Bitcoin a reliable safe haven asset?
A: While Bitcoin showed resilience during this stock sell-off, its volatility means it’s not yet a stable store of value like gold.
Q: How does the dollar index affect Bitcoin?
A: A weaker dollar often lifts Bitcoin, as investors seek non-fiat alternatives.
Q: Could Fed policy changes impact crypto prices?
A: Yes. 👉 Learn how monetary shifts drive crypto markets.
Key Takeaways
- Bitcoin’s rise amid equity declines highlights its growing alternative asset appeal.
- Macro uncertainty and dollar weakness remain critical crypto price drivers.
- Watch the $90K resistance level for Bitcoin’s next major move.
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