Bitcoin is rallying towards the $74,000 mark, gaining over 10% since the outbreak of war in the Middle East over the weekend. In a notable divergence from historical patterns, this surge is occurring alongside a strengthening U.S. dollar, with the Dollar Index (DXY) gaining over 1% this week to hit a high of 99.68.
The rally is unfolding against a backdrop of risk aversion in global equities, puzzling many market watchers as a stronger dollar typically weighs on dollar-denominated assets like Bitcoin. However, this inverse correlation has been repeatedly challenged since President Donald Trump returned to the White House promising pro-crypto policies. Both assets have moved in tandem during key periods, including the lead-up to and aftermath of the 2024 election.
Demand for BTC from the U.S. appears to be strengthening, a constructive signal for the market. The Coinbase Premium index, which measures the spread between prices on Coinbase and Binance, rose to 0.0227%, the highest since December, indicating stronger demand from U.S. investors.
The focus now is whether Bitcoin can decisively break through the historical resistance zone around $74,000. Traders are also watching upcoming U.S. macroeconomic data, including the Employment Situation report for February on March 6, CPI on March 11, and the next FOMC meeting on March 17-18, which are seen as potential volatility catalysts.
Other major tokens, including Ether (ETH), XRP (XRP), and Solana (SOL), rose 2% or more, with the CoinDesk 20 Index also up over 2%. Meanwhile, macro observers remain cautious, noting the fragile equilibrium in the Middle East conflict could disrupt markets.
