Bitcoin surged to an intraday high of over $88,000 on Monday, recording its strongest price point since late March. Although it eventually pulled back to around $86,800, the flagship cryptocurrency’s performance reflected growing investor anxiety over political and economic instability in the United States. The spike in price coincided with a sharp drop in the U.S. dollar, which tumbled to its lowest level in three years.

Massive Short Liquidations Fuel the Rally

According to data from CoinGlass, more than $97 million worth of short positions in Bitcoin were liquidated within the past 24 hours. The liquidation frenzy was not limited to Bitcoin alone. Across all cryptocurrencies, short positions totaling nearly $180 million were wiped out. Ethereum traders faced particularly heavy losses, with over $26 million in shorts forcibly closed.

This wave of liquidations added significant momentum to the bullish trend in the crypto market. As traders scrambled to cover their positions, buying pressure surged, sending Bitcoin to new highs and pushing other digital assets along with it.

Trump’s Criticism of Fed Chair Sparks Market Reaction

The dollar’s weakness stemmed from growing concerns over the Federal Reserve’s independence. Former President Donald Trump intensified his long-standing criticism of Fed Chair Jerome Powell. In a post on Truth Social, Trump declared that “Powell’s termination cannot come fast enough,” signaling his deep dissatisfaction with the central bank’s policies. The remark followed weeks of public pressure urging the Fed to cut interest rates.

Adding fuel to the controversy, White House economic advisor Kevin Hassett confirmed that the Trump administration had begun examining the legal basis for removing Powell. This revelation rattled financial markets, raising alarms about potential political interference in what is supposed to be an independent monetary authority.

As a result, the U.S. Dollar Index dropped by more than 1%, hitting levels not seen since March 2022. The dollar’s weakness further boosted Bitcoin’s appeal as an alternative store of value, especially amid fears of central bank destabilization.

Equities Slide as Investors Seek Safe Havens

The turmoil in monetary policy did not go unnoticed in the traditional financial sector. Stock markets reacted sharply on Monday morning, with major indices in New York posting steep losses. The Dow Jones Industrial Average, S&P 500, and Nasdaq each fell by approximately 3%.

Analysts attributed the sell-off to heightened uncertainty over the Fed’s autonomy and the broader macroeconomic outlook. Investors viewed the potential for central bank manipulation as a serious risk to market stability. Consequently, many turned away from equities and moved funds into perceived safe havens like Bitcoin and gold.

Bitcoin and Gold Shine as Dollar Weakens

Gold, long considered a classic hedge against economic uncertainty, joined Bitcoin in its rally. On Monday, the precious metal traded above $3,420 per ounce, marking its highest price on record. The simultaneous rise of both assets indicated a broader shift in investor sentiment, as many sought to protect their portfolios from political and economic headwinds.

Interestingly, Bitcoin’s behavior on Monday broke from its usual correlation with equity markets. While cryptocurrencies often move in tandem with stocks during risk-on or risk-off cycles, Bitcoin’s divergence suggested that some investors now view it as a hedge, similar to gold, during periods of instability.

Ethereum Lags Behind as Altcoins Show Mixed Performance

While Bitcoin captured most of the spotlight, other cryptocurrencies experienced mixed results. Ethereum, the second-largest digital asset by market capitalization, remained flat at approximately $1,624. Over the past month, Ethereum has dropped more than 20%, underperforming Bitcoin significantly.

Among other notable altcoins, Dogecoin saw a modest gain of 1.9%, XRP edged up by 0.15%, and MATIC posted an impressive rise of nearly 5%. Solana, however, slipped slightly by about 0.5%. The TRUMP token, a meme coin named after the former president, registered gains of over 2%, likely benefiting from heightened media attention.

Geopolitical Developments Add to Market Complexity

In addition to domestic monetary policy concerns, international trade developments also played a role in shaping market dynamics. Over the weekend, Trump announced that “big progress” had been made in discussions with a Japanese trade delegation. His comments followed recent tensions involving China, which reportedly signaled a willingness to reengage in negotiations if treated with more respect.

Earlier this month, Trump imposed a fresh round of tariffs, escalating trade tensions and adding further volatility to global markets. These developments contributed to investors’ growing uncertainty, prompting many to shift assets into crypto and commodities.

Market Outlook Remains Uncertain Amid Policy Volatility

Despite the optimism surrounding Bitcoin’s recent rally, market analysts caution that the current environment remains highly volatile. The combined pressures of political influence on monetary policy, trade disputes, and falling equity prices have created an unpredictable landscape.

Still, the sharp appreciation of Bitcoin and gold suggests that investors are actively seeking protection against inflation, currency devaluation, and central bank overreach. As traditional assets struggle under the weight of uncertainty, alternative investments appear increasingly attractive.

Bitcoin’s Behavior Signals Evolving Role in Global Finance

Bitcoin’s recent surge represents more than just a market reaction—it highlights the cryptocurrency’s evolving role in global finance. Investors are beginning to treat Bitcoin not merely as a speculative asset but as a legitimate hedge against traditional risks, including political instability and monetary policy shocks.

Although skeptics remain cautious about Bitcoin’s volatility and regulatory risks, its performance during this latest episode suggests a growing maturity in the market. If this trend continues, Bitcoin could further solidify its status as a core component of diversified portfolios.

Conclusion: Investors Shift Toward Alternative Assets

In summary, Bitcoin’s rise past $88,000 on Monday underscores a significant shift in investor behavior. With the U.S. dollar in decline and the Federal Reserve under political pressure, traditional markets have come under strain. Meanwhile, Bitcoin and gold have emerged as top destinations for capital seeking safety and long-term value.

As uncertainties in monetary policy and international trade persist, investors will likely continue to explore alternatives outside the traditional financial system. In this climate, Bitcoin’s role as a digital safe haven may gain further prominence in the months ahead.