Key Points
- The decline of the U.S. dollar index may signal a potential market rally for Bitcoin (BTC).
- Investor sentiment is shifting towards BTC, indicating a potential price increase.
The U.S. dollar index’s recent fall could be a historical indicator for a market rally for Bitcoin. Investor sentiment is gradually turning favourable for BTC, suggesting a possible price swing.
Over the past 24 hours, Bitcoin has experienced a steady price rise, moving back into the $90,000 zone. At the time of writing, it was approximately $92,500, following a 6.12% increase.
Dollar Index’s Impact on BTC
The Dollar Index’s weakening and the building buying momentum among investors are driving this recent accumulation. If this sentiment continues to grow, the asset is likely to experience a significant push upwards and cross the $100,000 mark.
The U.S. Dollar Index, which gauges the dollar’s strength against a basket of six commodities, has seen a decline. Historically, a weakening dollar index tends to benefit cryptocurrencies like BTC and altcoins.
Bitcoin’s Market Performance
The amount of Bitcoin sold in the spot market over the past 24 hours has started to decrease. As of the time of writing, BTC sales totalled $163.54 million on the 5th of March but have since fallen to $87.12 million.
If this trend persists, it’s likely that investors will start accumulating again, leading to increased net inflows on exchanges. The fund market premium, which indicates whether investors are buying or selling, was 0.2 at press time, indicating buying activity.
Institutional Investors’ Behavior
After consistent market outflows from the Bitcoin exchange-traded funds (ETF) market, indicating institutional investors selling BTC, the sentiment is changing. BlackRock, a notable institutional investor with over $50 billion in BTC ETF via IBIT, has stopped selling.
When selling slows down or stops, it often suggests that investors are re-evaluating their positions and may soon start buying again, especially in a bullish environment. At the time of writing, BTC ETFs recorded an inflow of $22 million in the past 24 hours, indicating renewed interest among institutional investors.