Bitcoin Surges on Political Chaos and Dollar Weakness

The leading cryptocurrency breaks key resistance levels and approaches $88,000 as tensions between the White House and the Federal Reserve shake traditional markets.

The price of Bitcoin (BTC) experienced a notable rally this Monday, rising 2.40% to $87,221 at the time of this report. The price reached a high of $88,400. This moderate rally occurred in a context marked by the tariff truce initiated by United States President Donald Trump and a marked weakness in the US dollar, which plummeted amid growing political tension between the White House and the Federal Reserve. Furthermore, Bitcoin managed to break through a key resistance zone defined by the 50- and 200-period exponential moving averages.

During its recent price rally, Bitcoin also managed to test a fixed resistance level at $88,000. / TradingView

Tariff Truce and Political Turbulence Shake Markets

Last week, President Trump's decision to implement a 90-day tariff truce brought some respite to global markets. However, the calm was short-lived, as uncertainty gripped investors again amid rumors that Trump was exploring the dismissal of Federal Reserve Chairman Jerome Powell. Trump's pressure for the Fed to cut interest rates, seeking to reduce the cost of US borrowing, has generated a high-profile political confrontation.

Dollar in Freefall Fuels Bitcoin's Rise

Amid this uncertainty, the US dollar suffered a severe setback, plummeting against other major currencies. The DXY index, which measures the strength of the dollar, fell to 98.36 points, losing crucial support in the 99.84 point range that had held since July 2023. This dollar weakness could be acting as a catalyst for Bitcoin, as cryptocurrencies historically tend to benefit from a weaker dollar.

The White House vs. the Fed: A standoff that keeps the market on edge

Financial markets remain on edge amid growing tensions between the White House and the Federal Reserve. Molly Brooks of TD Securities, quoted by Dow Jones News Wires, considers it unlikely that President Trump will fire Powell, noting that his term ends in May 2026 and that such an action would trigger unnecessary, lengthy litigation.

Bitcoin Breaks Through Resistance and Eyes $95,000

In its recent price rally, Bitcoin also managed to test a fixed resistance at $88,000. This rally was accompanied by a notable increase in trading volume compared to the past two weeks, slightly surpassing the 25-day average in the current session. With this shift in sentiment and trading above the 50- and 200-period moving averages on the daily chart, Bitcoin entered bullish territory. If it manages to overcome the resistance at $88,000, which does not appear as strong, the price could advance towards the next resistance zone at $95,000 in the coming weeks.

Open interest (OI) in Bitcoin futures signals increased bullish confidence

The Bitcoin futures market also reflected this optimism, registering an interesting 4.95% increase in open interest over the past 24 hours. Bitcoin's OI reached $58.61 billion hours before the close of trading on Monday, marking a new high since April 13. This upward trend in open interest, which has accompanied Bitcoin's price recovery since late March, suggests that bulls are re-entering positions, anticipating a likely new rally.

Bitcoin has demonstrated remarkable resilience by breaking through key resistance levels amid political uncertainty and a weak dollar. The strong correlation with risk appetite and growing interest in the futures market suggest a possible bullish reversal. However, the inherent volatility of the cryptocurrency market requires caution, and investors should closely monitor developments in the global political and economic situation to anticipate Bitcoin's next price movements.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency trading is highly volatile and carries significant risks, including the total loss of your invested capital. Consult a financial advisor before making any investment decisions.