Currently, Bitcoin can be threatened by growth in the US economy, not other cryptocurrencies. The US Dollar Index (DXY), which compares the US dollar with a basket of major global currencies, has been rising sharply recently. Currently, he’s flirting with a break past the 100 mark and heading towards 101.6. The growth of the US dollar is usually the precursor to future BTC revisions.
Pressure on BTC
This surge coincides with the bitcoin struggle at a resistance level of less than $120,000. In the past, DXY and Bitcoin had an inverse relationship. Risky assets, such as Bitcoin and other assets derived from US dollars, usually suffer when the dollar is valued. A strong dollar indicates that foreign investors prevent Bitcoin purchases, reduce global liquidity, and usually indicates a broader macro-count as money moves to safe and secure shelters.
DXY is about to surpass a significant moving average cluster, but Bitcoin is consolidating under the pronounced horizontal resistance of the current chart. Bitcoin could encounter challenges that could lead to more significant fixes if the dollar continues to be strengthened and sees a reversal from the previous downward trend. What’s more, this is more than just a short-term price action.
DXY gains power
If DXY gains traction of more than 102 resistance and the cryptocurrency market, particularly the speculative sector like Altcoins, is likely to maintain collateral damage, it shows a wider flight to safety. Bitcoin volume also shows signs of fatigue, suggesting that its RSI is still high and is waning in momentum.
Unless BTC makes a clear breakout immediately, the convergence of dollar macro pressure and resistance could indicate short-term bearishness due to convergence at $120,000. If DXY rises, a sudden retracement of Bitcoin is possible. The Bulls must violate $120,000 before Macronus can contract further. Until then, risk management will be the first to come.
