Bitcoin Price Dips as US Dollar Hits New Lows, But Analysts Predict a Rally Will Recover Losses

Bitcoin (BTC) has swung wildly in recent weeks, bouncing around $60,000 per bitcoin as traders brace for a China earthquake.

Bitcoin has swung wildly in recent weeks, largely driven by fears over the U.S. economy and dollar as the bitcoin price dropped from its all-time highs of over $70,000 in March.

Now, as the bitcoin price recovers and trades around $60,000 per bitcoin, some traders and analysts are suggesting that a weak dollar could boost the bitcoin price to new all-time highs once more.

The U.S. dollar hit its lowest level since the start of the year on Wednesday as fears mount over the state of the U.S. economy and whether the Federal Reserve will cut interest rates.

The dollar has hit its lowest level since the start of the year, sparking fears of further ... [+] collapse and potentially feeding a bitcoin price boom.

The dollar's decline in recent months comes as investors are waiting for Federal Reserve chair Jerome Powell to signal the Fed will cut interest rates next month during his closely-watched speech at the Jackson Hole economic symposium meeting of central bankers on Friday.

"The market is looking for a soft [economic] landing and Fed rate cuts ... which is negative for the dollar," Athanasios Vamvakidis, head of G10 foreign exchange strategy at Bank of America, told the Financial Times, adding the dollar is "still overvalued."

Meanwhile, traders are also betting on continued U.S. spending that will push up the $35 trillion debt pile whether former president and Republican candidate Donald Trump returns to the White House in November or if vice president Kamala Harris wins it for the Democratic Party.

"As the market comes to grips with whatever candidate wins, we’re in for four more years of reckless fiscal policy," VanEck's head of crypto research Matthew Sigel, told CNBC. "The history is that bitcoin really hits its stride at that point. So we’re buyers here. We think it recovers."

Sign up now for CryptoCodex—A free, daily newsletter for the crypto-curious

The bitcoin price has dipped in recent weeks but remains far higher than its lows of 2022.

The bitcoin price rally has this year been largely driven by the long-awaited arrival of a fleet of spot bitcoin exchange-traded funds (ETFs) on Wall Street, with some betting that the continued success of the funds will support the bitcoin price into 2025.

Institutional investors have "bought the dip" over the second quarter of the year, despite a decline in the bitcoin price of 12%, according to a report from asset manager Bitwise, with the company's chief investment officer, Matt Hougan, calling it a "great sign."

"If institutions will buy bitcoin when prices are volatile, imagine what could happen in a bull market," Hougan wrote in the report, adding: "The institutions are coming, and they're coming in size."

While bitcoin and the dollar decline, the price of gold has hit a fresh all-time high this week on growing fears of international instability.

"I think what we’re seeing here is that investors don’t yet move into bitcoin during periods of uncertainty,” Kaiko research analyst Adam Morgan McCarthy told Decrypt.

The above is the detailed content of Bitcoin Price Dips as US Dollar Hits New Lows, But Analysts Predict a Rally Will Recover Losses. For more information, please follow other related articles on the PHP Chinese website!