Bitcoin Price Dynamics: Influence of DXY, Bond Yields, and Global Money Supply
Bitcoin (BTC) is experiencing a recovery to $90,000 after a period of decline. Key factors influencing its potential rise include falling U.S. bond yields, a declining dollar index (DXY), and an increasing global money supply. A movement above $93,750 is critical for confirming a bullish breakout.
In recent months, Bitcoin has faced significant pressure, entering a technical bear market after a 20% decline from its peak this year. Currently, Bitcoin (BTC) is trading at $90,000, reflecting a recovery of approximately 15% from its monthly low. Important factors may drive Bitcoin’s upward momentum in the coming months, including developments in the bond market.
U.S. bond yields have retreated from their peak levels this year, with the ten-year yield decreasing from 4.8% in January to 4.24%. Similarly, yields on the 30-year and five-year bonds have also recently declined. This shift suggests that market participants expect the Federal Reserve to implement multiple interest rate cuts, following the release of disappointing economic data that has weakened consumer and business confidence.
Additionally, the U.S. dollar index (DXY) has entered a downward trajectory, falling for five consecutive days to a low of $103.78, marking a nearly 7% decline from its peak this year. Historically, Bitcoin tends to perform well during periods of declining bond yields and a weakening dollar, as these conditions heighten the likelihood of interest rate reductions by the Federal Reserve.
Furthermore, the global money supply is anticipated to continue rising, with governments increasing spending. For instance, Germany plans substantial expenditures on defense, while China has announced initiatives to boost its spending. Notably, Bitcoin has shown a close correlation with the global M2 money supply, which may provide a supporting backdrop for its price.
From a technical perspective, Bitcoin has shown resilience, climbing from a low of $78,000 last week to its current price of $90,000. The cryptocurrency has maintained its position above an ascending trendline connecting its lowest swings since August of the previous year. Additionally, it has crossed above the 50-day moving average, as well as the weak stop & reverse point of the Murrey Math Lines.
To affirm a bullish breakout, Bitcoin must surpass the strong pivot and reverse level at $93,750, which aligns with this week’s peak. A breach above this level could signal further gains, potentially pushing prices towards the $100,000 mark.
In conclusion, Bitcoin’s recent performance and future potential are influenced by key factors such as declining U.S. bond yields, a weakening dollar, and the anticipated increase in global money supply. These elements contribute to an environment that could foster further price appreciation for Bitcoin, especially if it can break through pivotal technical resistance at $93,750. Investors should monitor these economic indicators closely.
Original Source: crypto.news
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