Bitcoin Eyes Breakout as US Dollar Weakens and Gold Soars
Macro Volatility Sparks Optimism for Bitcoin Despite Market Caution
As the U.S. dollar stumbles and gold reaches historic highs, Bitcoin (BTC) is starting the week with fresh momentum, testing multi-week highs amid increasing macroeconomic uncertainty. But while BTC flirts with the $88,000 level, seasoned traders remain cautious.
Bitcoin Rises as Trade War Heats Up
Bitcoin surged by 3% over the weekend, reaching $87,705 after the April 20 weekly close—its highest level in nearly three weeks. This sudden upward move comes in the midst of escalating tensions from the U.S.-China trade war, a theme that’s increasingly influencing global markets.
But despite the price rally, many traders are warning against early celebration.
“Nice breakout, but it’s on low volume,” wrote Stockmoney Lizards. “You shouldn’t be too euphoric yet.”
Others echoed this sentiment, including trader IncomeSharks, who pointed to the low liquidity of weekend trading and emphasized the need for confirmation during traditional market hours.
Skepticism Reigns Despite Technical Breakout
Popular analyst Michaël van de Poppe predicted the gains might not last, noting both Bitcoin and gold may “give it back.” Similarly, Scott Melker (“Wolf of All Streets”) remarked that BTC must clear $88,804 to break out of its current downward structure of lower highs and lower lows.
“Is it time?” Melker asked, reflecting the cautious optimism among investors.
Federal Reserve Commentary in Focus
Traders Eye Fed Policy as Trump Fuels Economic Anxiety
This week, eight senior Federal Reserve officials are expected to comment on the economic outlook, while President Trump has taken direct aim at Fed Chair Jerome Powell, even calling for his removal.
Markets are now watching closely to see if interest rates will be cut—something currently only anticipated by June, according to the CME FedWatch Tool.
Meanwhile, China’s response to U.S. isolation efforts has already sent shockwaves through the market. Stocks are sinking, but gold and Bitcoin are rallying, suggesting a shifting narrative.
“The narrative in both Gold and Bitcoin is aligning for the first time in years,” wrote The Kobeissi Letter. “A weaker US Dollar and more uncertainty are on the way.”
Gold Nears $3,400 Amid Trade Jitters
Is Bitcoin Ready to Follow Gold’s Lead?
Gold prices surged nearly 30% year-to-date, approaching $3,400 per ounce, as traders seek safe havens amid global turmoil. Many, including Kobeissi, attribute this to Trump’s aggressive trade war tactics, particularly his recent post highlighting “non-tariff cheating.”
For Bitcoin, this mirroring of gold’s trajectory is a new development, and it may signal a significant bullish shift in market perception. Historically, BTC has trailed gold’s moves by about three months, raising the possibility of continued upside if the pattern holds.
“After futures opened, it didn’t take long for $BTC and $GOLD to move up quickly,” noted Daan Crypto Trades. “A pretty interesting move.”
U.S. Dollar Breakdown Fuels Bullish Sentiment
DXY Plummets to Three-Year Low—Is This Bitcoin’s Moment?
The U.S. Dollar Index (DXY) is now at its lowest level since March 2022, down nearly 10% year-to-date. According to Andreas Steno Larsen, this signals a potential breakout scenario for Bitcoin and commodities alike.
“The US Dollar has gone ‘no bid,’ teetering on a historic 14-year uptrend breakdown from 2011,” said Rock Bottom Entries.
Historically, Bitcoin thrives during periods of rapid USD weakness, making this a closely-watched metric for bulls.
New BTC Investors Already in Profit
Confidence Builds Among New Entrants
Fresh data from CryptoQuant reveals that recent buyers are already seeing 3.7% average profits, thanks to the push to $87K. This is being seen as a short-term bullish signal, suggesting reduced panic risk and growing confidence among new entrants.
However, short-term holders (STH), who bought BTC within the last six months, still have a cost basis around $91,000—a critical resistance level.
“Until BTC closes above $91K, Short-Term Holders remain in loss,” warned CryptoQuant. “This may sustain latent sell pressure.”
What This Means for Bitcoin’s Next Move
The convergence of dollar weakness, macro uncertainty, and gold’s surge is creating a fertile environment for Bitcoin to break out of its months-long downtrend. But with resistance looming near $91K, the next few days will be pivotal.
If the market confirms strength with traditional finance back in full swing and macro headwinds continue, Bitcoin may be poised for a significant leg up.
