Bitcoin (BTC) falls back on a strengthening dollar

The cryptocurrency market is reeling as the dollar strengthens and inflation looms.

This Tuesday, the price of bitcoin (BTC) fell significantly, trading at $86,064 and recording a loss of close to 3%. This decline of bitcoin (BTC) occurs in a context in which the US dollar is strengthening, while the market awaits the October inflation data in the United States. The recent election of Donald Trump as president generates uncertainty in the markets, with fears that his economic policy could trigger new inflationary outbreaks.

Bitcoin experiences a correction amid a strengthening dollar and inflationary expectations. / TradingView

The dollar on the rise

The dollar index (DXY) rose to 105.99 points, driven by speculation that the Federal Reserve could find obstacles to continue cutting interest rates. In the bond market, the yield on two-year bonds rose to 4.31%. Trump's policy, which includes tax cuts and tariff increases, could limit rate cuts, thus strengthening the dollar. When the dollar strengthens, bitcoin (BTC) and other cryptocurrencies tend to retreat.

Impact on the cryptocurrency market

Traders in the federal futures market reduced their bets on a new 25 basis point interest rate cut, from 84% to 65% in the last month. This move strengthens the dollar and reduces the value of risk assets such as cryptocurrencies. Bitcoin, which had reached an all-time high of $89,940, is now experiencing a technical correction movement after breaking all-time highs.

Bitcoin technical analysis

Despite the current correction, bitcoin maintains an upward trend, as the short- and long-term moving averages align upwards. However, the recent momentum led the cryptocurrency to overbought areas, with an RSI index above 80 points. On the weekly chart, bitcoin found resistance near $90,000, an area that could prove difficult to overcome due to low trading volume.

If bitcoin breaks through this resistance, it could advance towards $120,000. If not, a rejection or correction could push the support to $72,000. Analysts will be closely monitoring market movements, especially in such a volatile economic environment.

Disclaimer: This article is for informational purposes only and does not constitute financial advice.