Bitcoin has dipped below the crucial 200-day simple moving average of $109,380, signaling possible weakness as the dollar index (DXY) keeps gaining strength.
This downturn may lead to further selling from technical traders, possibly driving bitcoin down towards $100,000 or lower. The dollar index, which gauges the U.S. dollar against major global currencies, rose to 99.72 — its highest since August 1 — spurred by Federal Reserve Chair Jerome Powell’s hawkish remarks downplaying a rate hike in December and the Bank of Japan’s dovish approach, which weakened the yen.
Interestingly, bitcoin’s drop comes despite positive news in U.S.-China trade relations. Presidents Donald Trump and Xi Jinping reached an early accord to lower tariffs — decreasing U.S. tariffs on Chinese products from 57% to 47% — and enhance trade. This agreement also includes China’s commitment to secure rare earth supplies, purchase U.S. soybeans, and combat fentanyl trafficking. However, this optimistic development has not sparked a crypto rally, indicating underlying demand weaknesses.
Other cryptocurrencies are also feeling the strain: seems set to confirm a “death cross” with its 50- and 200-day simple moving averages in the upcoming days, while solana declined despite strong initial interest for Bitwise’s SOL spot ETF.
