Bitcoin rises, dollar drops, Japanese inflation rises and gold nears ‘blow-off top’

The beginning of this post-Easter week will be dominated by news of the death of Pope Francis, while economically the focus will be on the Federal Reserve’s comments on the state of the US economy. The White House is hoping for any sign from the Federal Reserve that it is ready to lower short-term interest rates soon.

Bitcoin is doing quite well in the meantime and immediately rose to $88,000 on Monday, the highest level in the month of April. At the same time, the dollar remains under pressure (also good news for digital currencies) while many expect a ‘blow-off top’ for gold, which reached another new record.

Gold

A ‘blow-off top’ is a technical sign on a chart that indicates that a certain investment vehicle has risen too much and urgently needs to undergo a healthy correction. Many analysts expect this to be the case for gold, which seems to be surfing from record to record this year.

Bitcoin, like gold for a while now, also seems to have regained its position as a ‘safe haven’ during stock market volatility. Investors have only seen the stock markets moving in one direction since the beginning of this year: down. In that respect, Bitcoin is doing reasonably well and seems ready to break out towards the upside. The largest digital currency will probably try to close on the daily chart above the $88k level, the 200-day moving average, in order to use the $90-$92k zone as support again. If that does not happen, Bitcoin can count on the fabulous support line around $75,000 which has proven to act very strong earlier this year already.

Inflation

Meanwhile, investors have another economic issue to worry about: inflation. It seemed to be under control, but with Trump’s tariffs, people were already worried that this figure would rise again. That now seems to be happening in one of the world’s largest economies: Japan.

Last Friday, monthly inflation in Tokyo came in at 3.6%. Core inflation (excluding food and energy prices) had already risen to 2.9%, up from 2.6% in February.

The trade war between China and the United States could potentially further fuel global inflation.