The Bitcoin price broke through $87,600 on Monday during Asian trading hours, reaching its highest level since early April. Analysts said investors are increasingly rotating capital into hard assets as inflation concerns continue.

The uptick was primarily due to “rising global liquidity, fueled by an expanding M2 money supply and a weakening U.S. dollar.” Vincent Liu, chief investment officer at Kronos Research, told Decrypt. M2 money refers to slightly less liquid forms than physical cash, like savings accounts and money market funds.

Bitcoin rose roughly 3.6% over the past day, with trade volume reaching at least $24.5 billion, outpacing other non-stablecoin cryptocurrencies by afternoon during Asia trading hours.

Liu notes that financial conditions have loosened, allowing investor capital to “rotate into hard assets such as Bitcoin and gold.”

Gold broke above the $3,400 per ounce level during Asia trading hours—a historical first. This extends its year-to-date gain to 29%, according to data from Trading Economics.

A new Bitcoin bottom forms

These new highs come less than a month after President Donald Trump’s so-called Liberation Day tariffs, which have caused a “sharp decline in overall asset prices,” Ryan Yoon, lead research analyst at Tiger Research, told Decrypt.

It was during this period that “key market sentiment indicators such as the Fear & Greed Index and S&P 500 RSI(14) formed a bottom,” Yoon said, adding that investors then began “looking for rebound opportunities and appeared to shift funds to Bitcoin,” which he claimed brings “higher growth than gold.”

The relative strength index, or RSI, that Yoon is referring to tracks market momentum. It’s most commonly used in 14-day periods to track how well a security—or, in this case, the S&P 500 index—has performed.

This shift into Bitcoin happened as the U.S. Dollar Index (DXY) crashed to 98.5, its lowest level since February 2022, following reports that President Trump is exploring ways to remove Federal Reserve Chairman Jerome Powell. Over the past three months, the index has plunged roughly 10%.

Over this momentum, markets “achieved an initial recovery” after Trump’s April 10th announcement of a 90-day tariff exemption for countries that have chosen not to retaliate. Buoyed by this factor, “on-chain indicators such as NUPL and MVRV-Z” showed improving conditions as well, Yoon said.

Investors need strategies “aligned with their risk tolerance and investment objectives,” to prepare adjustments for what Yoon claims is a period of “short-term volatility.”

Institutional confidence appears to be returning, albeit very slowly judging by Bitcoin spot ETF flows, data from Coinglass shows.

Last week, Bitcoin ETFs recorded $12.7 million in net flows, modestly reversing the previous week’s negative outflows. Despite this, the recovery represents the lowest weekly inflow level for this year.

“The correlation between BTC, gold, and equities is one to watch closely,” noted QCP Capital analysts in their April 21 Asia Color note. “The narrative of BTC as a safe haven or inflation hedge is once again gaining traction. Should this dynamic hold, it could provide a fresh tailwind for institutional BTC allocation.”

Still, analysts maintain a cautious stance over declaring a new bull run.

Such an assessment would “depend on the Fed’s messaging at the May 6–7 FOMC meeting.” Kronos Research’s Liu told Decrypt. If the Fed opens with a dovish stance, this could “sustain inflows,” while a “clear guidance on trade policy” could provide stability to the broader markets.

Edited by Stacy Elliott.