Bitcoin’s Surge Fueled by Dollar Weakness, But Broader Resistance Levels Remain in Play

Bitcoin has continued its upward trajectory, recently topping $118,000, buoyed largely by a retreat in the U.S. dollar’s strength. The U.S. Dollar Index (DXY), which measures the greenback’s value against a basket of major currencies, has steadily declined from its early 2025 highs of around 110 to below 98. This drop has softened the macroeconomic backdrop and created a more favorable environment for risk-on assets, especially cryptocurrencies like Bitcoin.

Yet, despite reaching new highs in dollar terms, Bitcoin’s performance remains more mixed when compared against other key financial benchmarks. For example, when measured against gold, Bitcoin is currently equivalent to about 35 ounces—down from its December 2024 peak of nearly 40 ounces. This suggests that while dollar weakness has fueled nominal gains, Bitcoin has yet to break through resistance levels in broader market terms.

Similarly, Bitcoin’s value in British pounds has not reclaimed its prior highs, and the asset has underperformed when compared to major stock indices such as the Nasdaq and S&P 500. Analysts say this underlines an important point: Bitcoin’s recent surge, while notable, is not yet a comprehensive breakout across the global financial landscape. “To call this a full-scale bull market, we need confirmation from other metrics, not just weakness in the dollar,” noted James Van Straten, lead analyst at CryptoSlate.

On-chain metrics provide a mixed picture as well. While inflows to spot ETFs and increasing long-term holder activity indicate continued institutional interest, resistance levels based on historical trading behavior remain significant. Technical analysts are closely watching the $120,000–$125,000 range, with many suggesting a clean break above this zone could trigger a new wave of momentum-driven buying.

In the short term, Bitcoin remains sensitive to macroeconomic shifts, particularly interest rate expectations and global liquidity trends. With inflation appearing to cool and central banks signaling more accommodative stances, risk assets may continue to benefit. However, unless Bitcoin can post gains that extend beyond just the dollar comparison, traders are likely to remain cautious.