Weak US Dollar Fails to Lift Bitcoin — Lack of Risk Appetite to Blame
Analysts say Bitcoin is lagging despite a weakening US dollar because the dollar’s decline stems from market fear rather than growth or looser liquidity, so capital is moving into safe havens like gold rather than risk assets. The US Dollar Index (DXY) has fallen to about 97.17 (24‑hour change ~-0.4%). Bitcoin (BTC) trades near $87,000, down over 6% in the past week and showing 24h volatility of 0.9%. CryptoQuant researchers note that past cycles saw BTC rise with a weak dollar when the move signalled inflation or easy money; this time flows went into gold and Bitcoin ETFs faced large outflows. The Coinbase Premium Index remains significantly negative, indicating persistent US spot sell pressure and weak institutional/long-term demand. BTC is trading below its 21‑week moving average (around $96,000), a technical threshold Matrixport says separates bull from corrective phases. Matrixport’s broader range places BTC between a bullish $121,000 and a bearish $70,000 zone if stress continues. Key implications for traders: monitor spot demand (Coinbase premium), ETF flows, DXY and gold flows, and whether BTC reclaims the 21‑week line — until risk appetite returns, rallies may rely on futures and short-term trades rather than sustained accumulation.
Bearish
The article points to weak spot demand, ETF outflows and a risk-averse USD move that sent capital to gold — not to risk assets. Key technicals reinforce a cautious stance: BTC is below the 21‑week moving average (~$96,000), Coinbase premium remains negative, and large US spot flows are selling into rallies. Historically, Bitcoin rallies tied to a weaker dollar required the dollar’s decline to reflect inflation or looser liquidity that spurred risk-on flows; when dollar weakness stems from market stress, BTC behaves like equities and can fall. Short-term impact: increased volatility with limited upside, as rallies are likely driven by futures and short-term positioning rather than fresh spot accumulation. Traders should expect range-bound or downside-biased action until ETF flows stabilize, the Coinbase premium turns positive, or BTC reclaims the 21‑week line. Longer-term impact: if macro stress eases and the dollar weakness shifts to a liquidity-driven environment, BTC could resume stronger appreciation; absent that, downside targets near $70k remain possible. This assessment aligns with past episodes where risk-off FX moves coincided with crypto underperformance and capital flowing to safe havens (e.g., prior periods when gold outperformed during USD stress).