Bitcoin’s Rally Reflects Dollar Weakness, Other Assets Highlight the Barriers Ahead

Bitcoin BTC reached an all-time high on Thursday, and is now in price discovery above $117,000, but the largest cryptocurrency by market cap remains below earlier records set against gold, benchmark equity indexes and the British pound.

That’s because much of the recent rally reflects the weakness of the dollar rather than any broad catalyst for crypto. The DXY index, a measure of the U.S. currency against a basket of trading partners, has fallen from 110 at the start of the year to below 98. Levels below 100 typically signal dollar weakness, which is generally supportive for risk assets.

For bitcoin to demonstrate true independent strength, it must outperform other assets too, and that’s not currently happening.

One BTC currently equals just over 35 ounces of gold, for example, whereas the all-time high was around 40 ounces in December 2024. Similarly, bitcoin is trading at 87,000 pounds ($117,800), while the all-time high stands at 90,000 pounds. As for stocks, the ratio of bitcoin to the S&P 500 and Nasdaq 100 also remains below historical peaks.

These levels represent long-term resistance zones. Once bitcoin decisively breaks through them, then true price discovery can begin. Without looking at bitcoin in relation to major assets other than the dollar, it’s hard to assess how it is really performing.

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