Trump postpones tariffs, bitcoin recovers

Dollar hits two-month lows as investors bet on cryptocurrencies ahead of possible Fed easing. Find out how bitcoin hit $98,374!

The dollar recorded its second consecutive drop, boosting the price of bitcoin, which rose 1.83% to $98,374. Trump's decision to postpone tariffs and a weak US retail sales report (-0.9%) are behind this rally in bitcoin. We analyze how these factors could shape the future of cryptocurrencies and financial markets.

Bitcoin tested the dynamic resistance of the EMA50 at $98,200, holding above the key support of $93,700 / Tradingview

The dollar in free fall: What does it mean for bitcoin?

The US dollar fell 0.59% on Friday on its DXY index, adding to Thursday's 0.58% drop and marking a two-month low. This weakening is largely due to the weak US retail sales report for January, which showed a 0.9% drop, well below the forecast of -0.1%. In addition, 10-year Treasury bond yields fell 6 basis points, reinforcing expectations that the Federal Reserve (Fed) could cut interest rates later this year.

A weaker dollar usually benefits risk assets, such as cryptocurrencies. Bitcoin, considered a risk asset due to its high correlation with indices such as the Russell 2000, took advantage of this situation to rise 1.83% and trade at $98,374 at the time of this report.

The impact of Trump and tariffs

President Donald Trump's decision to postpone the application of trade tariffs is also a key catalyst for the rally in bitcoin. Although inflation picked up recently, it is still considered under control, giving Trump room to delay protectionist measures. However, if inflation continues to rise, pressure to apply tariffs could grow, adding uncertainty to the markets.

US Retail Sales: A Sign of Economic Slowdown

The January retail sales report revealed a 0.9% drop, the worst since January 2023. This data suggests that consumers are reducing their spending, possibly due to high interest rates and inflationary pressures.

This weakening of consumption could lead to a downward revision of economic growth estimates. In addition, retail companies could face lower profit margins and staff cuts, which would generate more uncertainty in the markets.

Bitcoin: An opportunity amid volatility?

Bitcoin not only benefited from the fall of the dollar, but also from the increase in open interest in futures, which rose 2.37% in the last 24 hours, reaching $62.49 billion. Although technical indicators show neutrality in the short term, Bitcoin tested the dynamic resistance of the EMA50 at $98,200, holding above the key support of $93,700.

However, low trading volumes suggest that the market lacks the strength to significantly break the current resistances.

What to expect in the coming days?

The combination of a weak dollar, slowing domestic consumption and political uncertainty around Trump's tariffs create a mixed scenario for risk assets. While Bitcoin takes advantage of this situation to recover, investors should keep an eye on upcoming Fed decisions and key economic indicators.

In a context of high volatility, cryptocurrencies could offer attractive opportunities, but they also carry significant risks. The key will be to monitor the behavior of the dollar and monetary policy signals in the coming days.

Disclaimer: The information provided in this article is for informational purposes only and does not constitute financial, investment or trading advice. Please do your research and consult a professional before making any financial decisions.