Bitcoin has pulled back from record highs, impacting the broader market including ether, XRP, and solana. However, a positive shift in the U.S. financial system could keep BTC above $100,000 and lead to a rally this week.

The spread between SOFR and EFFR, which measures dollar liquidity conditions, surged last month, causing the dollar index to rise and BTC to fall. But the spread has since decreased, indicating easing financial conditions and normalizing liquidity.

With the SOFR-EFFR spread tightening, bitcoin is on the rise, trading above $103,000 with gains of 1.6%. Other cryptocurrencies like ETH, XRP, and SOL have also seen gains. Banks’ borrowing from the Federal Reserve’s repo facility has dropped, easing liquidity stress.

The dollar index’s rally has stalled, potentially benefiting BTC as a hedge against dollar debasement and inflation protection. These factors suggest a positive outlook for bitcoin and the broader crypto market in the coming week.

Read more at Yahoo Finance: Here’s Why BTC, XRP, SOL May Surge This Week