Financial markets are getting tighter as the U.S. Dollar Index (DXY) and U.S. Treasury yields hit new highs. This is putting pressure on risk assets, including cryptocurrencies.
Rise of the Dollar Index and Treasury Yields
The U.S. Dollar Index (DXY) is at 108.59, which is a 5.87% increase over the past year. The 10-year Treasury yield has risen to 4.73%, its highest level since April 2024.
Impact on Cryptocurrencies
Higher Treasury yields make traditional financial instruments more attractive to investors. When bonds pay more, investors move their money away from riskier assets like cryptocurrencies. A strong U.S. dollar also makes alternative investments like Bitcoin and altcoins less appealing, as it is a safer place to store value.
Market Reaction and Causes of Price Falls
Bitcoin’s price has dropped to $94,921, a 3% decrease. Ethereum is also down, trading around $3K, a 1.5% drop. It looks like these price movements are happening due to macroeconomic indicators, as traders react to the current economic conditions.
A strong U.S. dollar and high Treasury yields are significantly impacting the crypto market by reducing its attractiveness against safer traditional investment opportunities.
