Strong Dollar Puts Additional Pressure on Bitcoin Prices
The U.S. Dollar Index climbed above 102.50, its strongest level in 18 months, adding pressure to Bitcoin. Bitcoin dropped 1.62% over 24 hours to about $82,490 and was down 4.61% for the week, with a market value near $1.65 trillion. Traders are watching Fed policy signals and upcoming U.S. inflation data, while derivatives data showed heavy short positioning and $43.55 billion in futures volume.
The dollar index, tracking the U.S. currency against six major peers, topped 102.50 for an 18-month high. European and Japanese weakness supported it, alongside Fed restraint expectations and Cleveland Fed President Beth Hammack’s call for restrictive policy. Wednesday’s U.S. inflation data is awaited.
Bitcoin slipped from above $84,200 to about $82,460, with lower highs and lows. Futures volume hit $43.55 billion, open interest stayed at $52.25 billion, and liquidations totaled $54.76 million. Longs made up $43.22 million, shorts $11.54 million—about 79%.
A firmer dollar and weaker Bitcoin could weigh on crypto investors’ portfolios, especially leveraged traders already facing liquidations. It may also dampen retail interest and reduce spending or investment by those exposed to digital assets. Businesses accepting crypto could see less transaction demand, while traditional investors might view risk assets more cautiously. The upcoming inflation report and Fed signals could shape whether this pressure eases or intensifies, affecting market sentiment beyond crypto.