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- Bitcoin reclaims $120,000 amid institutional interest and clearer U.S. policy signals.
- Seasonal slowdown and equity market fatigue could influence crypto in the near term.
- Dollar weakness boosts BTC, but a rebound could pressure risk assets.
Bitcoin has crossed above $120,000 again after dipping earlier in the week. The move follows renewed interest from institutional players. Clarity in U.S. crypto regulation also helped restore confidence. The earlier surge above $120K triggered some profit-taking. That caused prices to fall briefly to $114,000.
On that scale, buying of returns reflected strong investor sentiment. This recovery confirmed continued optimism within the longer-term outlook of Bitcoin. Coming into summer, traditional finance marketplaces have moderated. Overseas investors tend to reduce risk around holidays.
Volume fell across equities, bonds, and commodities. It also influences volatility for Bitcoin. Less activity can reduce price swings, but, on the other hand, can increase the risk of sharp movements when large orders hit the market.
Stronger Dollar May Pressure Bitcoin and Stocks
U.S. shares, headed by the S&P 500, have moved sideways. Gains from early July have not reached far beyond that. Investors remain cautious. Threats around tariffs and energy prices weigh on hopes. Even good results from major companies may not be enough to push indexes higher without fresh impetus.
More importantly, Nvidia is surging sharply, dragging the index along with it. Larger tech stalwarts are also up, but less sharply. This steeper gain is suggestive of correction if interest in AI-driven expansion fades. Bitcoin, gold, and stocks have risen because of the weakness of the U.S. dollar.
The Dollar Index (DXY) has fallen 10% year to date. This has made dollar-denominated assets look 10% stronger on a nominal basis. After accounting for that weakness, however, actual gains appear less impressive.
Net positioning in USD has turned short. Not sudden but any reversal would disturb market equilibrium. Dollar strength might put pressure on Bitcoin as well as other values that are built on USD weakness for performance.
U.S. Inflation Holds at 2.5%, Fed Remains Cautious
U.S. inflation remains 2.5%. Not high, but also, not declining. This deadlock keeps the Federal Reserve vigilant. Though rate cuts are still on the table for the next quarter, timing remains unknown. Markets remain susceptible to price shocks from the outside.
A dramatic inflation spike could delay easing of policy. That could place downward pressure on speculative assets, including Bitcoin. All the same, structural bullish sentiment for BTC remains. Prices would still be considered a healthy correction if they fall toward $110,000. This price played an instrumental role in the previous cycle and could provide good support here.
Ethereum, on the other hand, is gaining momentum as businesses continue to diversify into ETH based on recent movements of treasuries. Bitcoin could face slight movements in the days ahead, but long-term, expansion is due as major investors continue to show interest. It could go down as far as $110K, setting up better ground for its next major movement.
Related Reading: Bitcoin’s Next Major Move: Will It Reach $121K or Face a Correction?
