Bitcoin Price Rally Hits Wall at $90K Resistance

Bitcoin (BTC) has stalled at the $90,000 resistance level as currency investors focus on the rally in the dollar index (DXY), raising the risk of financial tightening that usually weighs on risk assets.

According to CoinDesk data, bitcoin, which rose enthusiastically to $ 90,000 early yesterday, fell to $ 85,000 in a short time.

After a staggering $20,000 price increase in just one week, it is quite normal for such a pause and pullbacks from all-time highs to occur. According to data shared by QCP Capital, such pauses usually mean that bulls are charging for the next rally and traders in the options market are positioning for a potential breakout of $110,000-120,000.

ING used the following statements in its statement yesterday: “As the market positions itself as active (investors) or hedging (institutional treasuries) in anticipation of a stronger dollar, traded volatility levels continue to increase. The only thing we need to pay attention to here is against the rising dollar trend.” not to struggle.”

As part of the so-called “Trump trade”, both BTC and USD have risen since Donald Trump’s victory in the US elections a week ago. DXY jumped 2.7% to 106.78, hitting a six-month high, according to TradingView.

However, the strength of the dollar could re-fuel the negative correlation between these two and at least slow down, if not completely stop BTC’s rise.

This is because the US dollar is a global reserve currency with a major role in global trade, international borrowing and non-bank borrowing. The appreciation of the dollar generally reduces investors with dollar-denominated debt from turning to riskier assets such as stocks and cryptocurrencies.

U.S. Treasury yields also continue to provide additional support for the dollar. The two-year bond yield jumped to 4.36% yesterday, reaching the highest level since July 31. The 10-year bond approached 4.46%, which was seen a week ago and was the highest level in several months.

The market activity reflects concerns that President-elect Donald Trump’s policies, particularly mass deportations, could fuel inflation and make it harder for the Federal Reserve to cut interest rates next year.

“Strong migration was one of the key elements that made central banks (not just the Fed) much more comfortable with fundamental price dynamics post-COVID,” Dario Perkins, managing director of global macro at TS Lombard, writes in a Nov. 11 note to clients. It helped solve the labor shortage (again, not just in the US). Repatriating millions of people would reverse these trends and recreate the situation we were in two years ago, depending on how many people were deported.”