The strengthening of the US dollar is creating pressure on Bitcoin and the cryptocurrency market as a whole. Investors are concerned about the implications for risk assets.
Bitcoin's Struggles
Bitcoin is facing difficulties staying below the resistance level of $120,000. Recently, an inverse relationship has been observed between the dollar and Bitcoin, where a stronger dollar leads to a decrease in interest in this asset.
Power of the DXY
The US Dollar Index (DXY) is attempting to break above the significant level of 100, and if it reaches 102, this could worsen challenges for the cryptocurrency market. A stronger dollar also means reduced liquidity in the market, negatively affecting active investments in Bitcoin.
Market Outlook
If DXY continues to rise, this may lead to a more significant retracement of Bitcoin. Investors should be cautious, as the current pressure from the dollar could signal a short-term bearish trend in the market.
Risk management should be prioritized as the strengthening dollar and resistance at the $120,000 level can create additional challenges for Bitcoin and other crypto assets.
