The stronger dollar could be that financial markets are losing momentum. Following last week’s Federal Reserve cuts in interest rates, the US dollar index has steadily gained momentum.
This was reinforced by today’s overly optimistic GDP printing. The third final revision, the United States Gross domestic production It rose 3.8% in the second quarter, breaking all forecasts and solidifying a much-needed economic recovery in the second quarter.
The unusual combination of more Dubu’s economic policies combined with GDP growth resulted in a stronger dollar than expected. The USD has risen 2.7% against the euro since the last FOMC meeting in September.
Greenback is up almost 0.40% in today’s session alone, indicating a new appetite for US assets and the potential for tightening the global financial situation.
The problem is that stronger dollars can also be viewed as a threat to risk markets such as stocks and crypto. More valuable USD generally means lower demand for risky assets as more capital flows into the US economy and makes bonds more attractive.
After the announcement of interest rate cuts, yields have risen steadily over the 10-year period. Since September 16th, the 10-year yield has increased from 4.020 to the current 4.145. This suggests that bond investors could reassess long-term inflation expectations and raise questions about hopes for future interest rate cuts.
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It’s no coincidence that most of the Bitcoin and Crypto markets also took a major blow this Thursday. Market-leading digital currency has lost more than 4.20% against the dollar since its peak yesterday.
This has led to Bitcoin reaching its lowest per coin since September 1st. At the time of writing, the currency is trading at $109,249, making it the first time in nearly four weeks to trade $110,000.
On September 25 alone, the total market capitalization of cryptocurrency fell by more than $188 billion, indicating how strong investors have avoided the risk after today’s economic report.
At first glance, lower interest rates seemed to boost financial markets, but this week’s crypto and stock performance reinforces the idea that future macroeconomic reports will be more important than ever in shaping investor sentiment.
Although it was as widely expected as the announcement of interest rate cuts, financial markets were already priced at low interest rates, and assets responded to the broader macro signals surrounding it rather than being reduced in itself.
As for Bitcoin, this dropback could mean entering the channel between $109.200 and $107.500. Throughout the year, this range serves as an important accumulation point, with the currency bouncing back and forth before picking up strength to surpass $110K.
In the daily time frame, the MACD histogram turned the bears upside down on Sunday, and today’s performance decline only strengthens the narrative that Bear can control in the short term. At the same time, the RSI was soaked at 36.45, but still far from “sold”, suggests that sellers could get more cooperation before fatigue.
Going forward, Bitcoin’s short-term trajectory may depend on future economic data releases. As in tomorrow’s Core PCE report, future inflation reports could serve as a key inflection point in market direction.
We all witnessed how quickly BTC injects volume this year and recovers from the retreat. While the current scenario is not ideal for those hoping for a new price discovery venture, Bitcoin’s resilience throughout 2025 suggests that short-term macro turbulence will not completely derail its wider trajectory.
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