Bitcoin Under Pressure as U.S. Dollar Strengthens to 18-Month High

Bitcoin continues to trade near $86,000 despite a stronger U.S. dollar and rising Treasury yields, leaving the cryptocurrency to navigate a tougher macroeconomic environment.

The U.S. Dollar Index (DXY) climbed to around 102.5 on Monday, marking its highest level in nearly 18 months. The index has advanced from roughly 99 in early September and moved above its 200-day moving average near 99, reinforcing the dollar’s bullish momentum.

Dollar strength can create pressure for bitcoin and other risk assets. A stronger greenback increases the cost of dollar-denominated debt for borrowers outside the United States and reduces the purchasing power of international investors. Higher U.S. interest rates can add another hurdle by making cash and Treasury securities more attractive alternatives to stocks and cryptocurrencies.

The Federal Reserve raised interest rates by 25 basis points in September, taking the target range to 3.75%-4%. Markets are now anticipating further tightening, with a policy rate of 4.5%-4.75% considered the most likely level by June 2027.

Treasury yields have also moved higher as markets contend with persistent inflation, rising government borrowing and concerns about U.S. fiscal sustainability. Longer-dated Treasury yields are trading at levels not seen in more than two decades, adding to the pressure on risk assets.

The dollar’s gains have been supported by weakness in the euro, which accounts for 57.6% of the DXY. The euro has slipped toward $1.12, a 17-month low, as political and fiscal concerns intensify across Europe.

France is facing scrutiny over its deficit and borrowing costs ahead of next year’s presidential election. In Spain, Prime Minister Pedro Sánchez has called a snap election for Nov. 29, adding another source of political uncertainty to the region.

Despite these pressures, bitcoin has remained relatively stable. BTC is still hovering around $86,000 after a strong opening to October, suggesting that buyers have so far absorbed the impact of the dollar’s renewed strength.