Right now, Bitcoin is kind of on hold. There’s this thing with the PPI (Producer Price Index) going up, which normally signals inflation, and the DXY (Dollar Index) should go up too. But here’s the twist: even though PPI is rising, the DXY isn’t following suit. Usually, when inflation is up, the dollar strengthens, but the fact that the DXY is flat shows the economy isn’t really picking up.
Bitcoin is kind of waiting to see what happens with Trump’s reciprocal tariffs. Remember when he tried imposing tariffs, but it backfired? Turns out, Europe only raised their tariffs by 2.5%, which isn’t a huge deal. The main thing I’m seeing now is that Trump’s business strategy is to push other countries to buy weapons from the U.S. because that’s where he sees money coming in. He wants that cash flow back to the States. But even with that, gold prices are still climbing, and there’s a chance we’ll see a delayed inflation effect (thanks to things like the RRP—Reverse Repo Program).
Now, I’ll be honest, I don’t always understand the daily movements of the RRP, but it’s been trending down. Powell, the Fed chair, says there won’t be any more Quantitative Easing (QE), but when the Treasury does buy back debt, that’s basically QE in disguise. So, in the meantime, Bitcoin is just following these moves and reacting as expected.
Looking at the market timeline for today (UTC+6), it seems like there’s some volatility to expect:
- From 8 AM to 12 PM, it’s chill—nothing big happening.
- From 1 to 4 PM, we’ll see some green, likely because the People’s Bank of China won’t be pulling back their liquidity anymore.
- After that, from 4 to 6 PM, it could dip into red.
- But then from 6 to 10 PM, it should go back up, mainly due to positive retail sales in China and the Fed not seeing inflation affecting consumer buying power.
- Then, after 10 PM, it might drop again, and by 1 to 8 AM, it could rise again as the RRP falls.
Here’s the thing: If retail sales go up, I expect Bitcoin to rise too. If they drop, well, Bitcoin could rise even more. It’s a bit of a sweet spot, don’t you think?
Now, a lot of people think that if the Fed gets hawkish (tightens monetary policy), the dollar strengthens, and that means Bitcoin would drop, like it did in 2022. But here’s where it gets interesting—if the DXY goes up because of rising debt (not economic growth), Bitcoin might not drop. Why? Because rising debt means inflation that’s just waiting to happen.
Trump’s got this plan with tariffs aimed at China. He’s been saying that China manipulates its currency to keep its goods cheap on the global market, but the Chinese people aren’t supposed to know about it. If they did, they’d probably be angry about their wages being kept low. And then, imagine industries in the U.S. being wiped out because of cheap Chinese goods—it would make anyone mad, right? So, Trump’s pushing tariffs to get the U.S. manufacturing back in action.
Meanwhile, big players like Goldman Sachs are betting big on Ethereum. They’ve boosted their Ethereum ETF holdings by 2,000%, and the Bitcoin ETF is at $1.5 billion. These guys aren’t buying crypto for fun—they see it as the future. Ethereum is also getting ready for some big moves, with things like staking and stable USD systems. The infrastructure is really taking shape, and that’s why institutions are stacking up on ETH. Even Binance moved $1.4 billion USDC via the Ethereum network!
Lastly, Powell warned that if the M2 money supply keeps growing at a sharp rate, we’ll definitely see inflation. He wasn’t talking about the past—he’s saying it’s still going to rise, which is a big deal for the economy.
Hope that helps! It’s a bit of a rollercoaster with all these factors influencing crypto, but at least now it makes a bit more sense.
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