Bitcoin (BTC) and Ether (ETH) began August under pressure as renewed macroeconomic headwinds—including rising U.S. tariffs and a stronger dollar—sparked risk-off sentiment across global markets.
Early Friday trading saw Bitcoin drop to $114,290, nearly testing a key bullish trendline drawn from April and June lows. Ether followed suit, falling to $3,616 before rebounding alongside BTC. At the time of writing, BTC trades near $115,900, while ETH recovered to $3,690, according to BITX data.
Dollar Surges on Inflation Fears
The volatility came as the U.S. Dollar Index (DXY) climbed above 100, marking its highest level since late May. The index, which tracks the greenback against a basket of major currencies, has surged over 3% in the past four weeks. Analysts attribute this to renewed inflation concerns stemming from President Trump’s sweeping new tariffs.
“Inflation is coming,” warned Robin Brooks, senior fellow at the Brookings Institution. “Tariffs are finally starting to impact prices—and that’s pushing the dollar higher.”
Trump’s late-Thursday announcement introduced a universal 10% tariff on imports, with a 15% floor for countries running trade surpluses with the U.S. Southeast Asian nations face even steeper duties.
Inflation Data Supports Hawkish Fed
The latest PCE data—the Federal Reserve’s preferred inflation measure—showed core inflation held steady at 2.8% in June, matching May’s pace and signaling persistent price pressures. Rising inflation reduces the likelihood of interest rate cuts, further supporting dollar strength.
This macro backdrop complicates the environment for risk assets like cryptocurrencies, which often decline as the dollar strengthens and monetary conditions tighten.
Yen Weakens Ahead of Jobs Report
Adding to global currency volatility, the Japanese yen fell to a four-month low against the dollar, with traders awaiting the U.S. nonfarm payrolls report for further economic clues.
What Traders Are Watching
- Whether BTC holds its bullish trendline support near $114,000
- Impact of U.S. tariffs on global inflation and Fed policy direction
- Further movement in DXY and yen, which signal global risk appetite
- Ether’s ability to stay above $3,600–$3,650, a key demand zone
With macroeconomic tension mounting, crypto markets may remain choppy. But as traders seek clarity from the Fed and jobs data, key technical levels in Bitcoin and Ether will likely determine short-term momentum.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.