Bitcoin, the flagship cryptocurrency, is on track to record another month in the green. It has so far plunged roughly 14.8% in April.
The top cryptocurrency had a rough start this year, dropping by over 15% in January. That was the worst start to a new year for Bitcoin since the brutal bear market in 2018.
In late March, Bitcoin surged to a new yearly high of $48,234, but its momentum fizzled out after bulls failed to gain footing above key resistance levels.
In the meantime, the U.S. dollar reached the highest level two decades earlier this week.
The U.S. dollar index (DXY), which measures the performance of the greenback relative to a basket of other foreign currencies, managed to hit 103.9 on Thursday.
The Japanese yen has lost its safe-haven status, plunging to the lowest level against the dollar earlier this week after Bank of Japan Governor Haruhiko Kuroda confirmed his commitment to the long-standing ultra-easy monetary policy. In such a way, the central bank would be able to continue defending its yield target.
A weak dollar usually serves as a tailwind for the world’s largest cryptocurrency. In late 2020, for instance, the DXY index dropped below 90 to hit the lowest level in more than two years. This coincided with a big runup in Bitcoin prices.
Bitcoin has so far failed to regain the $40,000 despite the dollar giving up some gains. The largest cryptocurrency is currently trading at $38,660 after slipping almost 3% over the past 24 hours.