Bitcoin (BTC) has surged nearly 10% from weekend lows, supported by favorable moves in traditional markets.
The dollar index, which measures the U.S. dollar against major currencies, fell to 97.27 on Thursday—the lowest since February 2022—according to TradingView. This decline follows calls for a Federal Reserve rate cut in July and weak housing and consumer confidence data. A weaker dollar typically eases financial conditions and encourages risk-taking.
Andre Dragosch, Head of Research at Bitwise Europe, commented on X that the dollar’s low level is very bullish for global money supply growth and Bitcoin.
Meanwhile, Nvidia (NVDA), a leader in AI and technology, reached a record high of $154.30 on Wednesday, up 4.33%. Both Nvidia and Bitcoin hit lows in late 2022 and have since trended upward. Their 90-day correlation stands at 0.80, showing a strong positive relationship.
Nvidia’s peak followed a bullish golden cross in Nasdaq futures, signaling a potential continuation of the risk-on rally.
In bond markets, the U.S. two-year note yield dropped to 3.76%, a level not seen since early May, while the 10-year yield fell to 4.27%, resulting in a steepening yield curve. Wealth advisor Kurt S. Altrichter noted on X that this steepening, combined with a falling two-year yield, can precede recessions. He warned traders to watch closely for signs the Fed has lost control.
Consumer confidence also declined last month, dropping 5.4 points to 93, with expectations—a short-term economic outlook measure—falling to 69, significantly below the 80 threshold that often signals a recession.
These trends, along with a recent drop in oil prices and Fed rate cut discussions, have led traders to anticipate easing measures. CME’s FedWatch tool shows interest rate swaps now price in about four basis points of easing at the July Fed meeting, up from near zero a week ago. Expectations for total easing in 2023 have increased from 45 to 60 basis points.