Bitcoin under pressure as dollar hits all-time highs

As the US Dollar Index (DXY) hits new highs, bitcoin struggles to maintain its critical support. Investors are scrutinizing the movements of the DXY and the monetary policies of the Federal Reserve, anticipating a near-term target of $80,000 for the crypto queen.

DXY on the rise, threat or opportunity for Bitcoin?

Crypto markets are going through a phase of uncertainty. This week, the DXY jumped to 109.37, a level not seen since November 2022, fueled by rising US bond yields.

Indeed, 10-year Treasury yields rose to 4.7%, reflecting investors’ concerns about persistent inflation and the economic policies of the new Trump administration.

Why does this increase in DXY impact bitcoin? Historically, bitcoin has shown a negative correlation with the dollar index: when the DXY rises, risky assets, including cryptos, experience downward pressure. Thus, BTC fell this week to $92,500, flirting with its key support of $90,000.

Despite this pressure, some analysts see an opportunity. Jamie Coutts, analyst at Real Vision, points out that the Trump administration could strengthen market liquidity, favoring a medium-term rebound for bitcoin.

« DXY’s current strength is putting pressure on bitcoin, but the Trump administration’s liquidity expansion and pro-crypto policies could reverse the trend in the medium term. “, he said.

A short-term goal of $80,000, realistic?

Burkan Beyli, co-founder of Biyond, provides a cautious analysis of the situation: “ And bitcoin below $94,000 would pave the way to $81,000 in the next five weeks“. He underlines the importance of the technical level of 95,180 dollars for next week, particularly in view of the upcoming publication of the consumer price index (CPI).

However, not all analysts share this bearish medium-term vision. Real Vision’s Jamie Coutts puts the impact of the current dollar strength into perspective, instead emphasizing the prospects for liquidity expansion and the pro-crypto orientation of the incoming Trump administration.

The current volatility of the crypto market is part of a broader context of readjustment of financial markets, as players try to anticipate the implications of future US economic policies. While a short-term correction seems likely, bitcoin’s fundamentals remain strong for many analysts who maintain an optimistic longer-term outlook.