Author: Big Smokey, CoinTelegraph; Translated by: Wu Zhu, Golden Finance.
Due to rising USA government bond yields and concerns among investors regarding the Federal Reserve's monetary policy plans, the USD index (DXY) chased new highs while the cryptos market fell sharply for the second consecutive day.
Although the USD index opened this week down 0.92%, Bitcoin suddenly rebounded to $102,000, but the index later reversed its trend, reaching 109.37, the highest level since November 2022.
The market also reacted negatively to the surge in USA government bond yields, with the 10-year bond yield breaking 4.7% and the 30-year bond yield rising to 4.93%. Although the catalysts for rising yields are diverse and complex, they essentially reflect market participants' concerns that inflation will remain high, as the economic policies of President-elect Donald Trump may widen the deficit.
In short, the market is beginning to digest the possibility of increasing long-term debt in the USA, and the policies of the soon-to-be Trump administration are expected to drive up inflation, even though they may stimulate economic growth.
As expected, Bitcoin's price reacted negatively to the strengthening USD index, and analysts are concerned that yield curve control will once again become a hot topic.
3-day chart of DXY and BTC. Source: TradingView.
BTC fell to an intraday low of $92,500, and analysts warn that if the $90,000 Resistance is not maintained, the price may continue to fall in the short term.
Burkan Beyli, co-founder of Biyond, pointed out:
If Bitcoin drops below 94,000 USD, the next target in the next five weeks would be 81,000 USD. For a downturn, Bitcoin's closing price next week must be below 95,180 USD. Next week, we will announce the CPI, so the bears may reveal their hand. Overall, I hold a bearish view on Cryptos in the short term (4 to 5 weeks), then very bullish, as I expect a correction in the USD after Trump takes office.
Jamie Coutts, Chief Analyst for Cryptos at Real Vision, seems to agree with Beyli's perspective, believing that the recent strengthening of the USD is not as important compared to the expected liquidity expansion and the upcoming pro-Cryptos stance of the Trump administration.
