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The price of Bitcoin surged to $87,400 on April 21, reaching its highest level since March 29. This rapid increase of over $3,000 within a day helped offset a significant portion of the losses seen in April. While a 4% increase in a single day is not uncommon for the volatile asset, the circumstances surrounding Monday’s surge has made market participants take note.
Reasons for Bitcoin’s Rise
One of the immediate factors contributing to the rise in Bitcoin price was the decline in the US dollar following National Economic Council Director Kevin Hassett’s remarks on Friday about President Donald Trump’s intention to replace Federal Reserve Chair Jerome Powell. This led to a drop in the dollar index (DXY) to 98.182 on Monday, with investors shifting towards traditional safe-haven assets like gold. Meanwhile, S&P 500 and Nasdaq futures were trading lower by around 0.5%.
Observers highlighted the divergence between Bitcoin and traditional risk assets. Financial author Mel Mattison noted on X that Bitcoin seemed to be breaking its correlation with risk-on assets, suggesting a shift towards trading more in line with gold. Apollo founder Thomas Fahrer echoed this sentiment, stating that Bitcoin’s surge while stock futures were down indicated a perception of Bitcoin as an alternative financial system.
The Kobeissi Letter pointed out the significance of both gold and Bitcoin hitting new highs, interpreting it as a sign of a weaker US dollar and increased uncertainty in the market.
Trade Policy Uncertainty
The weekend also saw renewed concerns about trade policies, with expectations for significant trade deals remaining unmet. Despite a ninety-day tariff pause announced by Trump, doubts linger about the likelihood of a comprehensive agreement within that timeframe.
FOX Business correspondent Charles Gasparino reported a potential trade deal with Japan being announced soon, although negotiations are still ongoing.
Bitcoin’s Price Breakout
Chart analysts pointed to a structural breakout on the daily Bitcoin chart, with the spot rate breaking through descending resistance from the all-time high. The next key level to watch is $88,804 to confirm a reversal of the previous downward trend.
Analysts have set $94,000 as the minimum target for the current rally, with market behavior at that level determining whether the uptrend will continue.
While the breakout is positive, some caution that it occurred on low volume during a weekend when stock markets were closed. The true test will be how Bitcoin behaves when markets reopen.
As of now, BTC is trading at $87,509.
Featured image created with DALL.E, chart from TradingView.com