Bitcoin price bounces back this week alongside tech stocks as Deutsche Bank warns of "contagion" fears

The bitcoin price has surged toward $100,000 per bitcoin as one closely-watched crypto investor calls the market bottom, telling people to “buy

Bitcoin has bounced back this week alongside tech stocks after a leak revealed serious establishment fears of crypto “contagion.”

The bitcoin price hovers around $71,000 as of Sunday morning (03:15 ET), remaining in sight of the key $75,000 level that could open the door to another leg of the bull market toward $100,000 per bitcoin.

Now, as Binance's chief executive confirms wild speculation that could blow up the bitcoin price, "major" U.S. dollar warnings are priming bitcoin for a “geopolitical fragmentation megaforce" shock.

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The preconditions are now in place for the beginning of a major dollar downtrend, Deutsche Bank analysts said on Sunday, setting the scene for a bitcoin price boom.

Deutsche Bank analysts George Saravelos and Tim Baker saw huge shifts in U.S. trade policy and a global reassessment of U.S. geopolitical leadership setting the scene for the end of a “higher for longer” dollar.

"Given the historical developments of the last few months our EUR/USD forecasts now anticipate the dollar entering a long-winded downcycle," the analysts wrote in a note seen by

.

The U.S. dollar has been supported in recent months by Fed chair Jerome Powell's relatively hawkish approach to interest rates in the face of inflation fears, though U.S. president Donald Trump has piled pressure on Powell to cut rates.

"In a world of extreme uncertainty and rapidly shifting policy norms, the risk of market dislocations and regime breaks remains high."

The warning echos the concerns of Goldman Sachs' head of FX who told Bloomberg this week that the U.S. dollar's weakness is "here to stay," as the world adjusts to the new tariff-based international trade order established by Trump.

"The dollar weakness that we've seen in the first half of 2020 is likely to persist as the dust settles on the U.S. trade policy shift and the world adjusts to a new economic and political equilibrium.

Meanwhile, Jay Jacobs, the head of thematics and active exchange-traded funds (ETFs) at the world's largest asset manager BlackRock, has predicted “geopolitical fragmentation” will be a “megaforce that drives the world forward over the next several decades."

"Directly related to that geopolitical fragmentation is the rise of bitcoin as people see more destabilisation and the need for alternative assets," Jacobs said during an interview with CNBC and adding that the bitcoin price is “decoupling" from technology stocks.

"Fundamentally, [bitcoin] should behave like an uncorrelated asset," Jacobs said. "The more we see time play out in this uncertain environment, the more we will see this dispersion."

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The bitcoin price has surged this week as traders bet on a recovery of so-called risk assets and fears swirl over the future of the U.S. dollar.

The world's biggest cryptocurrency dropped as low as $57,000 this year before bouncing sharply to trade toward $70,000 on Friday. Bitcoin is now up around 140% in the year to date.

The stellar gains come amid a broad-based rally in tech stocks and other assets perceived to be sensitive to risk appetite, as traders price in a potential U.S. dollar crisis and a Federal Reserve pivot on interest rates.

"We're headed for a major dollar downcycle, preconditions for which are now in place," Deutsche Bank analysts said in a note on Sunday, adding that the risk of a "regime break" in the currency markets is "still high."

The bank's analysts, George Saravelos and Tim Baker, said the huge shifts in U.S. trade policy and a global reassessment of U.S. geopolitical leadership bode poorly for the greenback.

"Given the historical developments of the last few months our EUR/USD forecasts now anticipate the dollar entering a long-winded downcycle," they said.

Their comments came after Goldman Sachs' head of FX warned this week that the U.S. dollar's weakness is "here to stay," as the world adjusts to the new tariff-based international