Bitcoin (BTC) Bull Case Strengthens: Dollar Index Plummets, Nvidia Correlation Hits 0.80, and JPMorgan, XRP ETF News Fuel Rally

According to Andre Dragosch, head of research at Bitwise, the U.S. dollar index (DXY) falling to its lowest level since March 2022 has 'very bullish implications for global money supply growth and bitcoin.' The bull case for Bitcoin (BTC) is further supported by several key factors from traditional and crypto markets. Tech giant Nvidia (NVDA), which has a strong 90-day correlation of 0.80 with BTC, hit a new record high, signaling continued risk-on appetite, as noted in the source. Concurrently, bond markets are showing signs of an impending recession with a steepening yield curve, a historical precursor to economic downturns that can favor assets like Bitcoin, an observation highlighted by wealth advisor Kurt S. Altrichter. Institutional interest continues to grow, with JPMorgan filing a trademark for digital asset services and asset manager Purpose planning to launch a spot XRP exchange-traded fund (ETF) in Canada. Despite a rally in altcoins like XRP and LINK, Nansen research analyst Nicolai Søndergaard suggests a full-blown alt season is not yet here, as BTC remains the primary market driver. Bitfinex analysts noted that recent aggressive selling and a 'Fear' sentiment reading resemble past capitulation setups that often mark local bottoms, suggesting a potential for recovery if BTC can hold the $102,000-$103,000 support zone.
SourceAnalysis
Bitcoin (BTC) has mounted a significant recovery, surging nearly 10% from its weekend lows to trade around $108,600 as a confluence of bullish macroeconomic signals and positive institutional developments invigorate the market. A key catalyst for this renewed optimism is the pronounced weakness in the U.S. Dollar Index (DXY), which tracks the greenback against a basket of major fiat currencies. The DXY fell to 97.27, its lowest point since February 2022, amid growing speculation of a Federal Reserve rate cut in July and disappointing U.S. housing and consumer confidence figures. A weaker dollar typically enhances global liquidity and encourages capital to flow into riskier assets like cryptocurrencies.
Macro Tailwinds and Recessionary Cues Fuel BTC
The bullish sentiment is echoed by market analysts who see the dollar's slide as a significant tailwind. According to Andre Dragosch, Head of Research for Europe at Bitwise, the DXY's drop to its lowest level since March 2022 has "very bullish implications for global money supply growth and bitcoin." Further bolstering this outlook are developments in the bond market. The yield on the 2-year U.S. note, which is highly sensitive to rate expectations, fell to 3.76%, its lowest since early May. This has caused a steepening of the yield curve, a phenomenon where the spread between long-term and short-term bond yields widens. Historically, as noted by wealth advisor Kurt S. Altrichter, a bull-steepening of the curve often precedes a recession, which could prompt the Fed to adopt a more accommodative monetary policy. Adding to these concerns, the Conference Board’s expectations index, a measure of short-term consumer outlook, fell to 69, well below the 80-point threshold that often signals an impending recession.
Tech Stock Correlation and Institutional Inflows
The rally in crypto markets finds a strong parallel in the traditional tech sector, particularly with AI chipmaker Nvidia (NVDA). Shares of NVDA soared 4.33% to a record high of $154.30, continuing a powerful uptrend that began in late 2022, much like Bitcoin's own recovery. The 90-day correlation coefficient between BTC and NVDA stands at a robust 0.80, indicating a strong positive relationship and suggesting that traders are viewing both as key plays on emerging technology and innovation. This risk-on sentiment was further validated when Nasdaq futures formed a bullish golden cross, a technical signal often associated with sustained upward momentum.
Beyond macroeconomic factors, crypto-specific institutional news has provided significant fuel for the recent price action. JPMorgan filed a trademark application for a product aimed at offering a suite of digital asset services, including trading, exchange, and payment solutions. This move by a Wall Street giant signals deepening institutional commitment to the asset class. Simultaneously, the momentum for altcoin-focused investment products is growing, with asset manager Purpose set to launch a spot XRP exchange-traded fund (ETF) in Canada. This news helped propel XRP to gains of over 6%, with the token trading around $2.23. The broader crypto market also saw strong performance, with an index of the top 20 digital assets rising 4.3%.
Despite the strong performance of altcoins like XRP and Chainlink (LINK), which posted gains of 6-7%, an imminent "altseason" may not be guaranteed. According to Nansen research analyst Nicolai Søndergaard, Bitcoin remains the primary market driver. "BTC has mostly served as a trigger for altcoins," he stated, noting that profits from Bitcoin's record highs often trickle down but haven't led to prolonged altcoin rallies. The focus remains squarely on BTC. Analysts at Bitfinex observed that last week's market action, which saw the Fear and Greed Index dip into "Fear" and aggressive selling reflected in Bitcoin’s Net Taker Volume, resembled past capitulation events that often precede local bottoms. They suggest that if BTC can maintain support in the $102,000-$103,000 range, it could signal that selling pressure has been absorbed, priming the market for a sustained recovery. All eyes are now on the Federal Reserve, as traders await Chairman Jerome Powell's upcoming remarks for clues on future monetary policy, which analytics firm Swissblock notes will likely drive significant volatility across all risk assets.
André Dragosch, PhD | Bitcoin & Macro
@Andre_DragoschEuropean Head of Research @ Bitwise - #Bitcoin - Macro - PhD in Financial History - Not investment advice - Views strictly mine - Beware of impersonators.