Bitcoin prices have rebounded to $85,000 following a decline, paralleling trends in global stock and crypto markets amidst economic uncertainty.
Bitcoin Follows Dollar and Liquidity Trends
Bitcoin's price often moves inversely to the U.S. dollar index (DXY). Market analysts note that Bitcoin follows dollar movements with a 10-week delay. The weakening of the dollar since mid-January is now reflected in Bitcoin's price increase. Another major influence on Bitcoin's price is global money supply (M2), with a three-month lag. If these trends continue, Bitcoin could expect significant growth in the second quarter of 2025.
Crypto Industry Gains Political Support, but Markets Remain Cautious
Despite Congress being more favorable toward the crypto industry, the lack of clear regulatory guidelines is holding the markets back. Nevertheless, analysts like Wolfe Research remain cautious, warning of potential further weaknesses.
Stock Market Surges as Government Shutdown Fears Fade
The U.S. stock market also showed recovery as fears of government shutdown diminished. Indices like the S&P 500, Nasdaq, and Dow Jones posted significant gains after a week of declines. Political support and recovery in other assets like gold contribute to the return of investor confidence.
The rising prices in Bitcoin and stock markets indicate that investors are adapting to the changing economic and political environment. However, the lack of stable cryptocurrency regulatory policies leaves room for potential volatility.
