Amid a recent pullback in the Dollar Index (DXY), crypto traders are hopeful that continued dollar weakness will drive a resurgence in Bitcoin (BTC), although some banks have a different perspective.
Bitcoin has been trading in the $60,000 to $70,000 range since mid-March, with the DXY’s bounce contributing to this stability. However, the possibility of a DXY reversal and expectations of a weaker dollar have renewed optimism among Bitcoin bulls.
Mike Alfred, a value investor and managing partner at Alpine Fox LP, predicts a DXY turnaround towards 102-103, which he believes will coincide with a bitcoin rally to $90,000 in the short term. While some banks anticipate dollar strength, others see indications of a potential peak, with DXY projections ranging from 107 to 110.
Societe Generale’s Cross Asset Research Team and Scotiabank foresee a strong dollar, citing expectations of steady interest rates by the Federal Reserve. Additionally, the possibility of a U.S.-China trade war escalation could further support the dollar, as noted by Barclays.
Despite differing opinions, crypto traders are focused on the potential impact of a weaker dollar, historically associated with increased risk appetite and a favorable environment for Bitcoin and the broader crypto market. Traders are closely watching DXY shifts and geopolitical developments that could influence the dollar’s trajectory in the near future.
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