No one can predict the future, but increasing global debt, slow economic growth and expanding central bank balance sheets have the potential to weaken the dollar and investors seek safe areas in assets like gold and Bitcoin.
In recent weeks, the price of Bitcoin appears to have been driven by one main factor, namely the weakening of the US dollar. This correlation is evident when comparing the US dollar index against Bitcoin.
The inverse correlation between Bitcoin and the US dollar is supported by technical analysis on the price chart. The Rekt Capital Twitter account supports the analysis, that Bitcoin has broken an important resistance level. Bitcoin price is unlikely to fall below that level, which is at the level of US $ 8 thousand.
In addition, Bitcoin was successfully closed at the weekly price above the US $ 11,400 resistance area.
It is very unlikely to link the short term fluctuations of bitcoin to the long term weakening of the dollar, if anything we could link this to the long term upward trajectory of the price of bitcoin but nothing more.
I think that when it comes to this movement we are simply seeing factors that are exclusive to bitcoin and the market in general, the price was already in an upward trajectory before it crashed because of the pandemic concerns and since then it has increased once again, so it seems to me that this is the effect of the halving and the new enthusiasm the market is attracting due to the DeFi hype.