Bitcoin pauses at $90,000 as traders bet on a strong dollar. Could this emerging trend slow down the meteoric rise of BTC? Discover the stakes of this standoff between the two active stars of the moment…
While Bitcoin seemed set to conquer new heights, its rise hit a wall as it approached $90,000. At the same time, currency traders are betting big on a continued appreciation of the greenback, as highlighted by the ING bank. This emerging trend in the foreign exchange market could well redistribute the cards for the star of cryptocurrencies.
Bitcoin pauses at key level
After a spectacular surge of $20,000 in barely a week, shattering its historical records, Bitcoin needs to catch its breath. Its euphoric rally is indeed coming up against the major resistance of $90,000, identified last week by CoinDesk analysts.
According to the platform’s data, prices briefly fell to $85,000 on Tuesday, before stabilizing. Breathing considered healthy by observers after such an acceleration.
On the options market, operators are positioning themselves for a future breakthrough above $110,000, or even $120,000, as figures from QCP Capital reveal. They are reloading ammunition for the next bull round.
Forex traders bet on the dollar
But that’s without taking into account the other star of the markets at the moment: the American dollar. Buoyed by Donald Trump’s victory a week ago, the greenback is soaring against the main currencies, as evidenced by the 2.7% jump in the DXY index to a 6-month high.
According to ING, currency traders are working hard to bet on the continuation of this movement or to protect themselves from it, as shown by the surge in volatility on the foreign exchange market:
All we would say here is that we should not go against this emerging trend.
The continued strengthening of the dollar could reactivate its historic inverse relationship with Bitcoin. If the greenback maintains its appeal, this risks cooling risk appetite and weighing on BTC.
Headwinds from rates
To make matters worse, American bond yields are also tightening, with a 2-year rate at its highest since the end of July at 4.36% and a 10-year bond close to its peak at 4.46%. The market is worried about potential inflationary pressures linked to Donald Trump’s plans, in particular mass evictions which could worsen the labor shortage.
According to Darío Perkins of TS Lombard, reversing migration flows would recreate the tense situation of two years ago, complicating the Fed’s task if it has to ease its policy in 2025.
So, a simple pause or a lasting brake for Bitcoin? The next few days will be decisive in gauging the strength of this resistance at $90,000. But the crypto star will also have to deal with a reinvigorated dollar, determined to steal the spotlight.
