Takeaways from the conference:
BitcoinBTCIt has always had an opposite relationship to the US Dollar Index, or DXY. This index tracks the dollar’s strength in relation to a basket major foreign currency.
This correlation changes over time. However, the DXY’s rise to its highest levels in two months coincided with Bitcoin dropping below $114,000 last Friday.
The US dollar has reversed its direction, and is now showing signs of weakness. Traders will be watching to see if Bitcoin can reclaim $120,000.
DXY dropped to 98.5 points on Wednesday, after it failed to reach 100 last Friday. The Federal Reserve’s interest rate cut bets increased after a weaker than expected US jobs report in July. This weakened the dollar’s yield advantage. according Bloomberg.
Reuters noted As the US implemented new import tariffs against dozens of trading partners, this could raise prices at home and increase pressure on monetary policies.
Bitcoin gains can be capped by recession worries, even though a weak USD is able to boost the currency.
The US dollar is likely to be softer than usual. supportive for Bitcoin’s priceInvestors may react in the opposite way if they anticipate a slowdown of economic activity or become risk-averse.
Bitcoin, for example, failed repeatedly to stay above $67,000, and finally dropped to just $53,000 in early September.
Analysts can gauge the market’s sentiment by monitoring the ICE BofA Option-Adjusted High Yield Spread. This is a measurement of how much extra investors are willing to pay over the risk-free rate for lower-rated bonds.
Spreads are a combination of credit and debit. liquidity risksIt is widely used as a proxy to measure risk appetite. An increased reading signifies greater caution on the market, while a reduced reading implies that investors are willing to accept more risk.
Spreads spiked in 2024 August and Septembre, coinciding both with the weakening of the US dollar and the falling price of Bitcoin. It dropped to 2.85 at the end of July 2025, after reaching a high of 4.60 back in April. The decline in Bitcoin was matched by the rise of Bitcoin from its low point on April 7 at $74,500, demonstrating how improved credit conditions can help risk assets.
Related: Bitcoin may still have steam for $250K this year: Fundstrat’s Tom Lee
US Corporate Bond Market Assets total $11.4 trillion according SIFMA Research has a significant impact on the economy.
Companies will incur higher costs if they want to refinance their existing debts or issue new bonds. Capital costs that are higher can reduce earnings expectations and trigger a negative feedback cycle in equity valuations.
BTC bulls may be stopped by higher borrowing costs for the time being
The dollar could be weakened if the ICE BofA high yield option-adjusted spread rose significantly. Traders might move their funds to short-term US Treasurys, or look for higher returns abroad.
Currently around 3, the spread lies close to its moving 200-day average. This suggests that neither a pessimistic or overly optimistic market is taking place.
It is premature for now to assume that the recent DXY decline will lead Bitcoin back up to $120,000 anytime soon. The uncertainty in US labor market conditions Short-term forecasts continue to be impacted by the global trade tensions and, in particular, the tech sector’s reliance upon imported AI data processing systems.
The article does not provide legal advice or investment recommendations and it is intended for informational purposes only. These are solely the opinions, views, and thoughts of the author and may not reflect the opinions and views of Cointelegraph.
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Source: cointelegraph.com
