Bitcoin Reclaims $81,000 as Dollar Weakness Boosts Crypto

Bitcoin has bounced back above $80,000, briefly reaching around $81,000 after gaining more than 5% in 24 hours. The rebound comes as the U.S. dollar loses ground.

The main currency move is coming from Japan. USD/JPY dropped toward 155.4 as the yen strengthened sharply amid renewed speculation of Japanese intervention and expectations for a BOJ rate hike later this month.

The weaker dollar has provided a tailwind for Bitcoin. The DXY fell toward 99, while lower U.S. yields and reduced expectations for aggressive Fed tightening have also improved sentiment toward risk assets.

BOJ policy is now becoming an important part of the crypto market story. Markets are pricing in a high probability of a 25-basis-point rate hike on September 18, raising concerns about a potential unwinding of yen-funded carry trades.

Bitcoin’s recovery is also being supported by softer Fed expectations. Fed Governor Christopher Waller has signaled that he could support keeping rates unchanged if inflation continues to cool, pushing September rate-hike expectations lower.

The next major test will be U.S. employment data. A weaker jobs report could put further pressure on the dollar and support Bitcoin, while stronger data could lift yields and revive Fed tightening expectations.

For BTCUSD traders, $80,000 is now the key level to watch. Holding above it could keep the recovery intact, while renewed dollar strength could quickly put pressure on Bitcoin.