Bitcoin holds firm and the dollar retreats

The leading cryptocurrency resists global economic uncertainty and shows signs of stability in a volatile market.

The price of bitcoin remains on the rise, closing with a slight increase of 0.68% this Monday to stand at USD 90,464.08, while the dollar retreats. This behavior occurs in a context of a fall in the dollar, as speculators reduced their expectations of future interest rate cuts by the Federal Reserve. Since November 12, bitcoin has been operating sideways, consolidating in the price zone of USD 90,000.

Bitcoin holds steady at $90,000, showing resilience in a volatile market / TradingView

The dollar and interest rates fall

The DXY index, which measures the dollar against a basket of currencies, fell 0.41% to 106.23 points, finding resistance at 107.06 points. Despite this setback, the dollar maintains an upward trend. In 29 days, the Federal Reserve will announce the new interest rate, and bets on a 25 basis point cut decreased to 58.7%. In contrast, expectations that there will be no further cut rose to 41.3%, up from 34.7% last week. This keeps bitcoin strong against the dollar as the US currency retreats.

Impact of politics and geopolitics

The entry of the new administration of President Donald Trump, which promises to cut taxes and raise tariffs, could stoke inflation. This would limit the Federal Reserve's ability to reduce interest rates. Despite macroeconomic uncertainty and the recent announcement by outgoing President Joe Biden to authorize Ukraine to use long-range missiles in the war with Russia, Bitcoin held firm.

Capital flows and trading volume

Capital inflow through bitcoin ETFs rose again on Monday, with a positive net flow of $67.90 million. This follows two significant outflows last Thursday and Friday, of $402 million and $239.60 million, respectively. Additionally, Bitcoin open interest hit a new all-time high of $56.08 billion, indicating a growing interest in the cryptocurrency.

Market Trends and Outlook

In the short term, Bitcoin maintains a strong uptrend, trading above the 25-, 50-, 100-, and 200-period moving averages. However, it faces resistance at $93,000 and is currently trading sideways. Over the past four days, trading volume declined below the 25-day average. This suggests that the market has calmed down following the strong speculation-driven bullish rally after Trump's victory.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Readers are advised to consult with professionals before making investment decisions.