Bitcoin Surges 8% as Weak Dollar Drives Capital into Digital Assets

Bitcoin is currently holding at $117,761, marking an 8% increase this week. Concurrently, the US dollar appears to be weakening, as indicated by the WSJ Dollar Index closing at 94.73, which is just above recent lows and down 10.4% from its 2022 high. This weakening of the dollar is driving capital into digital assets as investors seek alternatives to traditional stores of value.

The technical indicators for Bitcoin are strong. The cryptocurrency has broken out of a symmetrical triangle and cleared the 0.382 and 0.5 Fibonacci retracement levels. The price is consolidating above $116,951, a key support zone. The 50-period Simple Moving Average (SMA) on the 4-hour chart is at $110,527, providing additional support to the trend. Momentum indicators also support the bull case, with the Relative Strength Index (RSI) at 75.5, indicating strong momentum without divergence. Until a bearish candle or volume drop appears, the path of least resistance is upward.

Macroeconomic forces are aligning in favor of Bitcoin. The Federal Reserve is divided on interest rate policies, with some members advocating for a wait-and-see approach while others see inflation risks that require further tightening. Markets are pricing in a 50% chance of a July rate cut, keeping traders on edge. In the crypto space, hopes for Exchange-Traded Funds (ETFs) are building despite the SEC delaying Grayscale’s Digital Large Cap ETF. Analysts believe more crypto ETFs are on the horizon as institutions begin to view Bitcoin as digital gold, making it a better hedge against rate changes and geopolitical risks.

Despite warnings from Peter Schiff to sell Bitcoin for silver, the market has largely ignored him. Bitcoin has risen 6% following his warning, with many citing institutional inflows and strong technicals as reasons to remain bullish. For a continuation trade, the setup involves an entry at a pullback to $116,950 (0.5 Fib), a stop-loss below $112,500 (0.382), and targets at $121,378 (0.618), $124,682, and $127,681. This is a Fibonacci confluence and trend play, with reversal signs such as a spinning top or Doji at resistance levels. However, risks remain, including the potential volatility from the July 12 Fed minutes and the impact of US government tariff policies on global risk sentiment and crypto indirectly.

In conclusion, Bitcoin’s technical breakout, a weak dollar, and growing ETF hopes suggest that more upside could be ahead. Whether Bitcoin reaches $300,000 this year depends on a confluence of events, including Fed policy, institutional adoption, and macro volatility. For now, bulls are in control.