Dollar rallies, crypto unmoved as courts deal setbacks to Trump’s tariffs

Crypto markets stayed quiet on Thursday, even as the U.S. dollar pushed higher following a court ruling that temporarily blocked President Donald Trump from imposing sweeping import tariffs on American trading partners.

The decision, which came from a federal trade court, stated that Trump overstepped his legal authority in slapping across-the-board duties—throwing a wrench in the White House’s protectionist playbook.

Trump’s team immediately filed an appeal, but the momentary pause in trade aggression gave the greenback enough oxygen to rally modestly across the board, including gains against the yen and the Swiss franc.

According to data from Reuters, the dollar rose 0.34% against both currencies and briefly hit a two-week high of 146.29 yen before easing slightly. It also moved up against the euro, now trading near $1.1276, while sterling weakened to around $1.3467.

All these brought the U.S. dollar index—which tracks the dollar against six major currencies—back above 100 for the first time in a week. Still, it’s down 8% year-to-date, and most analysts aren’t sold on the idea of a sustained rally, warning that a lengthy legal battle over tariffs could keep the market jittery.

Trump’s tariff loss boosts dollar and other currencies

The Trump administration’s trade unpredictability has been a consistent drag on U.S. assets this year, as investors grow more cautious about high government debt and inconsistent economic direction.

That change in risk appetite is showing up in Asian markets. As Trump’s trade tensions with China start to ease, investors are beginning to pull funds from U.S. assets and stack positions in Asian currencies.

A new Reuters poll showed rising bullish sentiment for the yuan, Taiwanese dollar, and Philippine peso, all hitting levels not seen since late 2020. The Chinese yuan, which is now at its highest long position since October 2024, climbed 1% this month, partly due to revived trade talks between Washington and Beijing.

Meanwhile, leaders across Southeast Asia have agreed that any bilateral trade agreements with the U.S. should not damage other member economies, a clear sign that Asia’s collective pushback to Trump’s tactics is gaining traction.

The Taiwanese dollar, for example, has already surged more than 6% in May, logging its strongest monthly performance ever. Taiwan’s president dismissed talk of any currency agreement with Washington, pushing back on rumors that spiked the dollar on speculation that Trump was influencing its value.

Bitcoin holds steady despite volatility in global markets

While fiat currencies were shuffling positions, crypto assets like Bitcoin barely moved. Bitcoin is currently holding around $108,500, after briefly climbing above $112,000 a week ago.

Despite muted price action, wallet addresses holding between 100 and 1,000 BTC have quietly accumulated 122,330 BTC over the past six weeks. This accumulation pattern, despite volatile macroeconomic conditions, suggests that larger holders are positioning for a longer-term bullish move, even as short-term price remains in check.

The Bitcoin price cycle is showing a peculiar resemblance to previous cycles, despite the crypto market’s now massive scale. From the 2015–2018 cycle’s 1076% gain, to the 2018–2022 cycle’s 1007% rise, and now the 2022+ cycle’s 656% surge, the structure remains shockingly similar. That says a lot about the underlying demand for Bitcoin, even with its much larger market cap today.

Profitability across the market is also changing. As Bitcoin climbed toward its previous all-time high, the Relative Unrealized Profit metric broke above its +2σ band. Historically, this level means euphoria is rising, often signaling heightened volatility and short-lived runs. Only 16% of trading days in Bitcoin’s history have seen paper profits this high.

That’s showing up in realized profits, too. The Volatility-Adjusted Net Realized Profit/Loss metric, which normalizes gains and losses relative to Bitcoin’s size and market volatility, has increased.

So far, 14.4% of trading days have seen larger realized profits, which means more investors are starting to cash out, but it’s not yet at panic levels.

Meanwhile, the derivatives market is heating up. Open interest in futures contracts has jumped from $36.8 billion in April to $55.6 billion today, up 51% in 49 days. That kind of growth indicates a rising level of leverage in the system.

Even more aggressive has been the rise in options contracts, which ballooned from $20.4 billion to a new all-time high of $46.2 billion. That’s a $25.8 billion increase, far outpacing the futures market.

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