Bitcoin traders are setting their sights on a short-term price target of $80,000 as the US Dollar Index (DXY) hits new heights.
The current cryptocurrency market is in the midst of a downturn, primarily influenced by the soaring DXY, rising Treasury yields, and increasing concerns over the Federal Reserve’s monetary policy.
The DXY, which had initially dipped earlier in the week, rebounded and later reached 109.37—marking its highest level since November 2022.
Rising Treasury Yields and Inflation Concerns
Heightened inflation worries are evident as the yield on the 10-year Treasury note has surpassed 4.7%, while the 30-year note climbed to 4.93%.
These rising yields point to a growing apprehension regarding the economic strategies of the new administration, which could potentially drive inflation even as it seeks to stimulate economic growth.
In light of these circumstances, Bitcoin saw a decline, with its price dropping to an intra-day low of $92,500.
Analysts caution that further decreases could occur if Bitcoin breaks through the critical support level of $90,000.
Burkan Beyli, co-founder of Biyond, highlighted that if Bitcoin falls below $94,000, it might plummet to around $81,000 within the next five weeks.
He stressed that it’s essential for Bitcoin to close above $95,180 in the coming week to avoid greater declines.
Market Outlook and Analyst Opinions
Despite the prevailing bearish outlook, Jamie Coutts, Real Vision’s chief crypto analyst, offered a glimmer of hope.
He pointed out that the anticipated expansion of liquidity from the new administration could shift market conditions.
Notably, he argued that given the strength of the dollar, Bitcoin should logically be trading closer to the $80,000 mark.
As the market stands, all eyes are on Bitcoin to see if it can defy bearish trends and capitalize on changing economic dynamics.
Source: Cointelegraph
