Today is April 21, 2025, Monday. The market has experienced a day of rebound, currently around 87,000 points. Most people in the cryptocurrency market may find this round of increase puzzling, as there doesn't seem to be any particularly obvious positive news. Why has the market risen? In fact, today's rise in Bitcoin is directly related to the dollar index.
The dollar is being collectively sold off, with the dollar index hitting new lows, directly breaking below 98, and Bitcoin experiencing an increase. The euro has risen by 2%, and the dollar against the yen once fell below the significant threshold of 140 points. However, in US stock futures, both the S&P and Nasdaq futures have dropped by more than 1%, and US Treasury yields are rising, indicating that traditional markets are still worried about economic issues. Whether Bitcoin's rise can be sustained will depend on the movements of American investors after the US stock market opens tonight. After all, the trading volume is still quite low.
Currently, the trade war has entered its second phase, the currency war. Here, I want to clarify a common knowledge point for better understanding. When the dollar appreciates, the trade deficit will increase. When the dollar depreciates, American-made goods will become cheaper, increasing competitiveness in the international market and helping to reduce the trade deficit!
From the recent negotiations between the US and Japan, South Korea, it seems Trump is trying to severely cut into the profits of Japan and South Korea. He is forcing the yen and won to appreciate, making Japanese and Korean export goods more expensive and difficult to sell, leading to factory closures and economic recession. Eventually, they will have to cut interest rates to stimulate the economy, leading to soaring inflation... This series of actions will likely harm Japan and South Korea.
Currently, there are two key points to pay attention to in the market. First, will the dollar continue to depreciate rapidly? The depreciation of the dollar theoretically benefits the cryptocurrency market. Second, will the rapid depreciation of the dollar lead to a collapse of the US stock market? There are many factors that can influence Bitcoin's price fluctuations. Previously, Bitcoin's price was limited in its response to the rise and fall of the dollar, but this time the situation is different. This time, the exchange rate is being manipulated artificially, and Bitcoin is directly affected. The decline in the dollar index is more bearish than bullish for US stocks, so there is a probability that the dollar index will lead to a collapse of the US stock market. If Bitcoin moves in line with the US stock market, it would theoretically be difficult to maintain above 88,000, but specifically, we still need to see the sentiment in the US after the stock market opens tonight.
In addition, the Nasdaq will release its first quarter financial report on April 24, 2025 (Eastern Time), which requires close attention. Additionally, there will be GDP data on April 30. This will determine whether the US economy is heading into a recession.
Overall, the current fundamentals are very unstable, and the situation is overly complex. This wave of increase can only be considered a rebound. To reverse the trend, at least the market needs to show confidence, and who provides this confidence? Only Bitcoin. Currently, the biggest concern in the market still comes from Trump, dealing with tariffs. If he can calm down, stabilize in April, start speculating on interest rate cuts in May, and initiate cuts in June, then the favorable expectations within this timeline will be activated one after another.
