{"id":53712,"date":"2025-08-07T03:55:09","date_gmt":"2025-08-07T03:55:09","guid":{"rendered":"https:\/\/emilynews.com\/blog\/?p=53712"},"modified":"2025-08-07T03:55:09","modified_gmt":"2025-08-07T03:55:09","slug":"dollar-weakness-boosts-bitcoin-hopes-but-macro-risks-could-delay-120k","status":"publish","type":"post","link":"https:\/\/emilynews.com\/blog\/?p=53712","title":{"rendered":"Dollar weakness boosts Bitcoin hopes, but macro risks could delay $120K"},"content":{"rendered":"<p>Bitcoin benefits from a weaker dollar, but credit market signals warn of possible investor caution that could prevent the bulls from making a run at $120,000.<\/p>\n<p><strong>Key takeaways:<\/strong><\/p>\n<ul>\n<li>\n<p>Dollar weakness alone may not be enough for Bitcoin to reclaim $120K.<\/p>\n<\/li>\n<li>\n<p>Ongoing global trade tensions add uncertainty to Bitcoin\u2019s short-term price outlook.<\/p>\n<\/li>\n<\/ul>\n<p>Bitcoin has historically maintained an inverse relationship with the US Dollar Index (DXY), which tracks the dollar\u2019s strength against a basket of major foreign currencies.<\/p>\n<p data-ct-non-breakable=\"undefined\">While this correlation shifts over time, Bitcoin\u2019s drop below $114,000 on Friday coincided with the DXY climbing to its highest level in more than two months.<\/p>\n<p>Traders are now watching for Bitcoin to reclaim the $120,000 mark as the US dollar reversed direction and began showing signs of weakness.<\/p>\n<figure><img decoding=\"async\" title=\"\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2025-08\/01987ff3-f096-708a-a099-3ce32d5385db\" \/><figcaption><em>US Dollar Index (green, left) vs. BTC\/USD (orange, right). Source: TradingView \/ Cointelegraph<\/em><\/figcaption><\/figure>\n<p>The DXY fell to 98.5 on Wednesday after failing to regain the 100 level last Friday. A weaker-than-expected US jobs report for July prompted traders to increase wagers on multiple interest rate cuts by the Federal Reserve, undermining the dollar\u2019s yield advantage, according to Bloomberg.<\/p>\n<p data-ct-non-breakable=\"undefined\">Reuters also noted inflationary concerns as the US imposed new import tariffs on dozens of trade partners, a move that can raise domestic prices and further pressure monetary policy.<\/p>\n<h2>Weak USD can boost Bitcoin, but recession fears cap gains<\/h2>\n<div class=\"m-auto relative\">\n<div>\n<p class=\"text-banner__heading\">Advertisement<\/p>\n<p class=\"text-banner__description\">One app, all things crypto \u2014 buy, trade, earn, and manage it all with Uphold. Capital at risk. Terms Apply.<\/p>\n<\/div>\n<\/div>\n<p>A softer US dollar can be supportive for Bitcoin\u2019s price, yet the opposite may occur if investors anticipate an economic slowdown or turn risk-averse for any reason.<\/p>\n<p>For example, between June and September 2024, the DXY declined to 101 from 106, but Bitcoin repeatedly failed to hold above $67,000 and eventually dropped to $53,000 by early September.<\/p>\n<figure><img decoding=\"async\" title=\"\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2025-08\/01987ff3-f6af-7341-9310-1bf91696a722\" \/><figcaption><em>US Dollar Index (green, left) vs. BTC\/USD (orange, right) in 2024. Source: TradingView\/Cointelegraph<\/em><\/figcaption><\/figure>\n<p>One way analysts gauge market sentiment is by tracking the ICE BofA High Yield Option-Adjusted Spread, a measure of the extra compensation investors demand over risk-free rates for holding lower-rated corporate bonds.<\/p>\n<p>This spread incorporates credit and liquidity risks, making it a widely used proxy for risk appetite. A higher reading signals greater caution in markets, while a lower reading suggests investors are more willing to take on risk.<\/p>\n<figure><img decoding=\"async\" title=\"\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2025-08\/01987ff3-fc8b-7aaa-aba6-027a0846541a\" \/><figcaption><em>ICE BofA high yield option-adjusted spread. Source: TradingView \/ Cointelegraph<\/em><\/figcaption><\/figure>\n<p>The spread spiked briefly in August and September 2024, coinciding with a weaker US dollar and falling Bitcoin prices. More recently, it dropped sharply to 2.85 by late July 2025 after peaking at 4.60 in April. This decline matched Bitcoin\u2019s rally from its $74,500 low on April 7, underscoring how improved credit sentiment can support risk assets.<\/p>\n<p><em><strong>Related: <\/strong><\/em><em><strong>Bitcoin may still have steam for $250K this year: Fundstrat\u2019s Tom Lee<\/strong><\/em><\/p>\n<p>The US corporate bond market totals $11.4 trillion in assets, according to SIFMA Research, and its influence on the economy is substantial.<\/p>\n<p>A higher spread means companies face greater costs when refinancing existing debt or issuing new bonds. Higher capital costs can lower earnings expectations, potentially triggering a negative feedback loop in investor sentiment and equity valuations.<\/p>\n<h2>Higher borrowing costs may stop BTC bulls for now<\/h2>\n<p>If the ICE BofA High Yield Option-Adjusted Spread were to rise significantly, traders might shift funds into short-term US Treasurys or seek higher yields abroad, both of which could weaken the dollar.<\/p>\n<p data-ct-non-breakable=\"undefined\">Currently near 3, the spread sits close to its 200-day moving average, suggesting neither an overly optimistic nor pessimistic market stance.<\/p>\n<p>For now, it seems premature to view the DXY\u2019s recent decline as a clear signal that Bitcoin will retake $120,000 any time soon. Uncertainty in US labor market conditions and the impact of global trade tensions, particularly the tech sector\u2019s reliance on imported AI data processing units, continue to weigh on the short-term outlook.<\/p>\n<p>*********************************<\/p>\n<p>If one of the paying programs on our Monitor appeals to you, please support <em>EmilyNews<\/em> by registering for it on our website. 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Thanks and See you tomorrow!<\/p>\n<p><a href=\"https:\/\/emilynews.com\/blog\/wp-content\/uploads\/2020\/11\/Reminder2-1.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-13137\" src=\"https:\/\/emilynews.com\/blog\/wp-content\/uploads\/2025\/02\/Reminder2-1.jpg\" alt=\"\" width=\"544\" height=\"600\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Bitcoin benefits from a weaker dollar, but credit market signals warn of possible investor caution that could prevent the bulls from making a run at $120,000. Key takeaways: Dollar weakness alone may not be enough &hellip; <a title=\"Dollar weakness boosts Bitcoin hopes, but macro risks could delay $120K\" class=\"exalt-read-more\" href=\"https:\/\/emilynews.com\/blog\/?p=53712\"><span class=\"screen-reader-text\">Dollar weakness boosts Bitcoin hopes, but macro risks could delay $120K<\/span>Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":53714,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5651,6],"tags":[139,3544,3812,5652,10,159,97],"class_list":["post-53712","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptonews","category-information","tag-bitcoin","tag-bitcoin-news","tag-cryptonews","tag-emilynews","tag-hyip","tag-hyipnews","tag-hyips","exalt-entry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Dollar weakness boosts Bitcoin hopes, but macro risks could delay $120K - EmilyNews<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/emilynews.com\/blog\/?p=53712\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Dollar weakness boosts Bitcoin hopes, but macro risks could delay $120K - EmilyNews\" \/>\n<meta property=\"og:description\" content=\"Bitcoin benefits from a weaker dollar, but credit market signals warn of possible investor caution that could prevent the bulls from making a run at $120,000. 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