TL;DR
- Bitcoin surpassed $90,000 but faces a temporary correction due to the strength of the U.S. dollar, which could slow its rise.
- The strengthening of the dollar and higher U.S. Treasury bond yields are generating uncertainty and putting pressure on risk assets, including BTC.
- Despite the correction, traders are positioning themselves for a potential Bitcoin rally towards $110,000, trusting in a long-term bullish trend.
Bitcoin (BTC) has reached a historic milestone by surpassing the $90,000 mark, setting a new record. However, the cryptocurrency now faces a consolidation period after a sharp $20,000 surge in just one week. This pause comes amid the growing strength of the U.S. dollar, which has started to generate uncertainty about the immediate future of risk assets, including BTC.
The Bitcoin rally was initially driven by positive market sentiment, alongside the results of the U.S. presidential elections. However, the strengthening of the dollar, observed in the DXY index, could hinder BTC’s ascent in the short term.
Currency analysts are betting that the dollar will continue its bullish streak, which could lead to global financial tightening. This tightening usually affects risk assets, such as cryptocurrencies, as investors tend to reduce their exposure to them during times of a strong dollar.
Bitcoin Could Reach $110,000
Bitcoin’s pullback to $85,000, after touching $90,000, is considered by experts to be a normal correction within such a strong bullish cycle. This pause could be an opportunity for the market to recharge before a potential rally towards $110,000 or higher. Traders in the options market are positioning for a breakout to these higher levels, trusting that the long-term positive trend will hold.
The Donald Trump Factor
On the other hand, the strength of the dollar could restore a historical negative correlation between BTC and the U.S. dollar. This could slow down, if not completely halt, Bitcoin’s climb, as an appreciated dollar generally leads investors to seek safer instruments.
The rise in U.S. Treasury bond yields also reinforces the pressure on risk assets. With a higher interest rate environment and the political uncertainty surrounding President-elect Donald Trump’s immigration policies, the global economic landscape could influence investors’ decisions
