Bitcoin Sees Potential Boost from Secular Dollar Decline

Macroeconomic strategist André Dragosch believes that Bitcoin could benefit from a potential secular US dollar downtrend. This trend may be triggered by an unwind of the AI trade, which has been pulling capital out of US Treasuries and into equities.

The trend is already visible in foreign holders like China and Japan, who have begun to pull their capital out of US Treasuries, but this move has not yet had a significant impact on equities. Dragosch suggests that if the AI trade unwinds, it could redirect flows into hard assets, challenging the diminishing returns hypothesis that has capped prior Bitcoin cycles since 2009.

The current technical setup for Bitcoin is bullish, with price above the EMA50 and EMA200. Momentum indicators show a neutral RSI at 55.81 and a death cross on the MACD. With price testing the upper Bollinger resistance and a neutral RSI, a healthy retracement toward the 50-EMA support appears probable before continuation.