Dollar

Donald Trump

Bitcoin

The United States dollar rising to year-to-date highs has raised concerns about the sustainability of the current Bitcoin bull run, with a crypto analyst warning traders to be cautious about making overly speculative bets.
“The macro backdrop has soured. Dollar strength is not good for Bitcoin,” Real Vision chief crypto analyst Jamie Coutts said in a Nov. 14 X <a data-ct-non-breakable="null" href="https://x.com/Jamie1Coutts/status/1856858322194030668" rel="noopener noreferrer nofollow" target="null" text="null" title="null">post</a>.
<h2 id="bitcoiners-should-be-wary-of-leverage-amid-usd-highs">Bitcoiners should be wary of leverage amid USD highs</h2>
Coutts pointed to his “liquidity framework” chart — which illustrates a historical negative correlation between USD and Bitcoin’s (<a data-ct-non-breakable="null" href="https://cointelegraph.com/bitcoin-price" rel="noopener noreferrer nofollow" target="null" text="null" title="null">BTC</a>) price — to suggest that Bitcoin’s price is “sensitive to short- to medium-term momentum shifts,” while cautioning traders to “be careful with leverage.”&nbsp;
<figure><img alt="Cryptocurrencies, Markets" src="https://s3.cointelegraph.com/uploads/2024-11/01932985-a93f-7493-929a-a684569e7ce5" title="">
 <figcaption style="text-align: center;">
 Source: <a data-ct-non-breakable="null" href="https://x.com/Jamie1Coutts/status/1856858346206498951" rel="noopener noreferrer nofollow" target="_blank" text="null" title="https://x.com/Jamie1Coutts/status/1856858346206498951">Jamie Coutts</a>
 </figcaption>
</figure>
Coutts said that the long-term outlook is “bullish,” though the chart signals “caution” in the short term.
According to TradingView <a data-ct-non-breakable="null" href="https://www.tradingview.com/symbols/TVC-DXY/#:~:text=Is%20U.S.%20Dollar%20Index%20going,the%20U.S.%20Dollar%20Index%20chart." rel="noopener noreferrer nofollow" target="null" text="null" title="null">data</a>, the US Dollar Index (DXY) — which tracks its strength against a basket of major currencies — is 106.7, up 3.18% since Nov. 6, the day after Donald Trump won <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/live-countdown-us-elections-2024-crypto-industry" rel="noopener noreferrer nofollow" target="_self" text="null" title="https://cointelegraph.com/news/live-countdown-us-elections-2024-crypto-industry">the US presidential election</a>.
Several recent <a data-ct-non-breakable="null" href="https://www.nasdaq.com/articles/dollar-recovers-and-pushes-higher-president-elect-trumps-policies" rel="noopener noreferrer nofollow" target="null" text="null" title="null">reports</a> have pointed to Trump’s victory as a significant factor behind the strengthening dollar, with “speculation that T-note yields will increase as inflation increases” due to Trump’s pro-tariff policies.&nbsp;
<h2 id="usd-uptrend-a-worry-for-btc-investors">USD uptrend a worry for BTC investors</h2>
Over the same period, Bitcoin’s price has risen by almost 28%. Still, the uptrend in safer assets like the dollar raises concern for <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/bitcoin-price-metrics-forecast-rally-to-100-k-and-above-here-s-why" rel="noopener noreferrer nofollow" target="_self" text="null" title="https://cointelegraph.com/news/bitcoin-price-metrics-forecast-rally-to-100-k-and-above-here-s-why">Bitcoin traders</a>, as there has historically been an inverse relationship between the two.
Related: <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/hitting-and-holding-100-k-bitcoin-price-depends-on-11-8-b-end-of-year-btc-options-expiry" rel="noopener noreferrer nofollow" target="null" text="null" title="null">Hitting and holding $100K Bitcoin price depends on $11.8B end-of-year BTC options expiry</a>
In July 2022, <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/bitcoin-s-inverse-correlation-with-us-dollar-hits-17-month-highs-what-s-next-for-btc" rel="noopener noreferrer nofollow" target="null" text="null" title="null">Cointelegraph reported that Bitcoin</a> dropped more than 60% on the year, while the dollar had surged, with the DXY hovering around its January 2003 highs of 105.8, amid recession fears
Coutts warned that “DXY is right at the resistance level. A break above here would not be good for risk assets.”
<figure><img alt="Cryptocurrencies, Markets" src="https://s3.cointelegraph.com/uploads/2024-11/01932986-77d0-7e10-9f47-e9365c7831b6" title="">
 <figcaption style="text-align: center;">
 Source: <a data-ct-non-breakable="null" href="https://x.com/Jamie1Coutts/status/1856858346206498951" rel="noopener noreferrer nofollow" target="_blank" text="null" title="https://x.com/Jamie1Coutts/status/1856858346206498951">Jamie Coutts</a>
 </figcaption>
</figure>
Still, he said that “this somewhat bearish backdrop” could be reversed by positive announcements <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/us-fed-bitcoin-ban-deficit-spending" rel="noopener noreferrer nofollow" target="_self" text="null" title="https://cointelegraph.com/news/us-fed-bitcoin-ban-deficit-spending">from the US Federal Reserve</a> or the Central Bank of the People’s Republic of China (PBoC).
Magazine: <a data-ct-non-breakable="null" href="https://cointelegraph.com/magazine/blockchain-gaming-success-adoption-web3/" rel="noopener noreferrer nofollow" target="null" text="null" title="null">Off The Grid’s success shows ‘invisible’ blockchain is the winning play</a>
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Analyst says strong DXY no good for Bitcoin price, urges leverage traders to be ‘careful’

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