Bitcoin surges mid-week then adjusts due to a strong dollar... weekly returns remain positive

Bitcoin has been highly volatile over the past week. It rose close to $74,000 midweek but then corrected ahead of the weekend, currently trading in the $70,600 range. Despite gaining over 4% in the last 24 hours, it has fallen about 6% over the past 7 days. The strong dollar is delivering a direct blow to risk assets like cryptocurrencies.

Altcoins Also Swing Amid Price Volatility

Ethereum increased by 4.55% in 24 hours but declined about 9% over the week. Solana rose 5.48% in 24 hours, Dogecoin 3.31%, and BNB 1.64%. XRP also gained 2.82% in the past day.

Interestingly, on a weekly basis, the story is different. Bitcoin still gained 3.6% over the past 7 days, Ethereum rose 2.6%, and BNB increased 2.1%. The strong rally midweek absorbed the shock from the war and even exceeded it.

Strong Dollar Weighs on Cryptocurrencies

This week, the dollar experienced its biggest weekly gain in a year. Rising energy prices, ongoing inflation concerns, and the Federal Reserve’s possible delay in interest rate cuts fueled dollar buying.

Bjørn Schmittke, CEO of Aurelion, said, “As tensions in the Middle East escalated last week, investors quickly moved into safe-haven US dollars. The market started reflecting rising energy prices and re-ignited inflation, leading to a stronger dollar, which also hints at a delay in Fed rate cuts.” This directly impacts all dollar-denominated assets like Bitcoin.

On-Chain Signals Send Mixed Messages

According to Glassnode data, 43% of Bitcoin supply is currently at a loss. This acts as a significant resistance factor. Every time the price attempts to rebound, holders who have been waiting for months to exit sell to break even, creating ongoing selling pressure during upward moves. One reason the $74,000 breakout attempt last Thursday failed was partly due to this.

On the positive side, Messari data shows weekly net inflows into stablecoins surged 415% to $1.7 billion. Daily transfer volumes also increased by about 10%. This indicates substantial capital waiting on the sidelines and suggests retail investors have not fully exited despite the fear. However, whether this capital will flow into Bitcoin or wait for lower prices remains uncertain.

Geopolitical Uncertainty Continues to Dominate Markets

Tensions between the US and Iran remain unresolved this week. Strains in the Strait of Hormuz and sustained high oil prices increase macroeconomic uncertainty. The strong dollar, persistent inflation, and delayed rate cut expectations create a macro environment that is highly unfavorable for risk assets like cryptocurrencies.

Bitcoin’s week looked impressive with a midweek touch of $74,000, but ultimately it fluctuated between the $68,000s and $74,000s, then retreated back near $70,000—just another day of broad sideways movement. After President Donald Trump announced a five-day halt on Iran energy infrastructure attacks, Bitcoin has held most of its gains above $70,000.

Altcoins also rose about 5%, and crypto mining stocks benefited from the broad stock market rally. The S&P 500 and Nasdaq gained approximately 1.2% each.

The Next Move Depends on Energy Markets

Analysts believe Bitcoin’s future direction hinges heavily on oil prices and the stability of shipping in the Strait of Hormuz. If stability returns, Bitcoin could retest the $74,000–$76,000 range. If conditions worsen, prices could slide into the mid-$60,000s. The upcoming weekly trend for Bitcoin will depend on geopolitical risks and macroeconomic signals.