BTC Stagnates at $90K Resistance, Echoing the Dollar’s Strength in Global Trade.

Bitcoin’s rally has encountered resistance at the $90,000 mark as the U.S. dollar strengthens, causing concerns that rising yields and a bullish dollar could slow the cryptocurrency’s momentum. Following a surge of $20,000 in just a week, the leading cryptocurrency briefly dipped to $85,000 earlier this week, showing signs of consolidation.

This pause isn’t unusual for such rapid price moves, and experts believe it may provide the necessary reset for further gains. The options market is still bullish, with traders positioning for a breakout beyond $110,000, according to QCP Capital.

However, the timing of bitcoin’s halt is notable. The dollar index (DXY) has surged 2.7% since Donald Trump’s victory in the U.S. presidential election, reaching a six-month high of 106.78. Analysts from ING have noted that volatility is rising as traders hedge against or position for a stronger dollar, warning that investors should not oppose this emerging trend.

If dollar strength continues, it could reestablish the negative correlation between bitcoin and the dollar, which historically means bitcoin’s ascent might be curbed. The U.S. dollar is a dominant force in global finance, and a stronger dollar typically leads to reduced demand for riskier assets, including cryptocurrencies.

Further compounding this potential headwind for bitcoin, yields on U.S. Treasury bonds have increased, signaling concerns about inflationary pressures and the Federal Reserve’s future interest rate decisions. The two-year note yield hit 4.36%, the highest since July, while the 10-year note has remained near multimonth highs.

With these market shifts, including the implications of Trump’s economic policies, bitcoin faces headwinds that could stall its upward trajectory, at least in the short term. However, as the market adjusts, many traders remain hopeful that the long-term outlook for bitcoin remains strong.

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