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Bitcoin climbed over $122,000 on Monday morning after the OG crypto found support at $120,080 Sunday night. From there, it gained about 3% through Sunday and is now within striking distance of the $123,218 peak set on July 14.

Technical readings show the bullish momentum is still in play. The Relative Strength Index (RSI) on the daily chart is at 65, well above the neutral 50 mark, while the Moving Average Convergence Divergence (MACD) signaled a bullish crossover on Monday.

These conditions point to the possibility of another leg up, though analysts caution that if the rally loses steam, Bitcoin could fall toward $116,000, a key daily support level.

Trump policy changes and ETF inflows boost demand

On Thursday, President Donald Trump signed an executive order instructing the Labor Department to work toward allowing 401(k) retirement plans to hold cryptocurrencies, private equity, and other alternative assets.

The change could open millions of retirement accounts to Bitcoin, potentially increasing buying activity. Analyst Fan said opening up these accounts to higher-risk investments could bring in “significant” demand.

Institutional flows remain another strong driver. Spot Bitcoin ETFs recorded $253 million in net inflows over the past week, keeping demand high despite some price consolidation after last month’s peak. Ethereum also saw strong interest, hitting its highest level since December 2021.

Spot ether ETFs drew in $461 million last week, surpassing Bitcoin’s ETF inflows and underscoring strong institutional participation in both assets.

Global markets watch inflation, trade deadlines, and currency moves

In U.S. equities, futures inched higher Sunday night. Dow Jones Industrial Average futures rose 56 points, or 0.1%, while S&P 500 and Nasdaq 100 futures both gained 0.1%. The uptick followed a strong close last week, with the Nasdaq Composite setting a new high, the S&P 500 just shy of another record, and the Dow buoyed by a rally in Apple.

Despite these gains, some investors remain cautious. Jay Woods, chief global strategist at Freedom Capital Markets, said the market might “be more in a digestion phase” and could see sideways movement. This week’s inflation data will be a major focus, with the consumer price index (CPI) due Tuesday and the producer price index (PPI) on Thursday.

Woods stressed that “the most important thing is the CPI data” for shaping expectations ahead of the Federal Reserve’s September meeting. These reports come before the Fed’s Jackson Hole gathering in Wyoming on August 21-23, which could set the tone for future rate decisions.

In Europe, IG futures suggest a positive open, with London’s FTSE 100 slightly higher, France’s CAC 40 up 0.2%, Germany’s DAX rising 0.3%, and Italy’s FTSE MIB up 0.5%.

Asian markets were quieter overnight as traders awaited word on whether the U.S.-China tariff truce will be extended past its August 12 deadline. The truce, currently set for 90 days, has helped ease tensions that had threatened to disrupt trade flows.

Emerging-market assets are also gaining. A weaker U.S. dollar boosted developing-market currencies, with the Indonesian rupiah leading gains in Asia. The Romanian leu and Czech koruna outperformed in broader emerging markets ahead of planned talks between the U.S. and Russia. An MSCI index of emerging-market currencies edged higher, while an MSCI gauge of EM stocks rose 0.2%.

Traders are watching for signs of a more dovish Fed, potential extensions to the U.S.-China tariff truce, and progress in the U.S.-Russia discussions later this week; factors they believe could help drive the next phase of gains in developing markets.

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