With the Dollar Index (DXY) in recent declines, cryptocurrency traders are hoping for continued dollar weakness to fuel a resurgence in Bitcoin (BTC), but some banks have a contrary view.
Recent trends have shown that Bitcoin has been trading within the $60,000-$70,000 range since mid-March, with the dollar’s rebound against the DXY contributing to this stabilization. However, the DXY’s trajectory reversal along with expectations of dollar weakness has reignited optimism among Bitcoin bulls.
Mike Alfred, value investor and managing partner at Alpine Fox LP, expects a reversal in the DXY and a return to 102-103, which he believes will coincide with a near-term Bitcoin rally toward $90,000. Some banks expect continued dollar strength, while others see signs of a potential peak for the DXY, with a forecast range of 107 to 110.
Societe Generale’s Cross Asset Research Team and Scotiabank are among those predicting a resilient dollar, citing expectations of a prolonged interest rate hold from the Federal Reserve. Barclays also said the possibility of an escalation in the US-China trade war, along with proposed tariff increases on Chinese imports, could further strengthen the dollar.
Despite differing opinions, cryptocurrency traders remain focused on the potential impact of a weaker dollar, which has historically correlated with increased risk-taking and a favorable environment for Bitcoin and the broader cryptocurrency market. Therefore, traders are closely monitoring changes in the DXY and geopolitical developments that could affect the dollar’s trajectory in the coming weeks.
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