Bitcoin Soars as US Dollar Gains Strength: Are Crypto Traders in Danger?

Bitcoin Soars as US Dollar Gains Strength: Are Crypto Traders in Danger?

Key Takeaways:

The US Dollar Index remained steady at 100 following a surprising Nonfarm Payrolls (NFP) report of 119,000 jobs created, far exceeding expectations of 53,000.
Bitcoin surged from $80,600 to over $86,000, although one analyst warned that this rise might not indicate true strength in the market.
The relationship between Bitcoin and gold suggests that Bitcoin may face structural weaknesses despite its recent price bounce.

Bitcoin's recent movement can be attributed to the response of global markets to new macroeconomic data, particularly the robust US nonfarm payrolls (NFP) report released on November 20, which revealed an addition of 119,000 jobs compared to an anticipated 53,000.

While such strong job figures generally reduce expectations for interest rate cuts—indicating resilience in the economy—the recent effect was mixed. The US Dollar Index (DXY) maintained a firm position above 100, marking its highest point in six months, while traders adjusted their forecasts regarding the Federal Reserve's upcoming decisions.

On Friday, John Williams, President of the New York Federal Reserve, mentioned that a near-term rate cut remains a possibility, citing that concerns about labor-market softness should be prioritized over inflation risks. Nevertheless, market sentiment appeared optimistic on Monday, with data from the CME Group indicating a 78.9% likelihood of a 0.25% rate cut in December, a significant rise from 44% the week before. Yet, Susan Collins, President of the Boston Fed, expressed uncertainty, reflecting a growing divide within the Fed's policy-making body.

Cryptocurrencies, Federal Reserve, Dollar, Gold, Bitcoin Price, Investments, Markets, Cryptocurrency Exchange, Interest Rate, Price Analysis, Market Analysis Fed Reserve’s interest rate cut expectation for December. Source: CME Group

Meanwhile, the US dollar strengthened against the euro and sterling amid increasing fiscal stress in Europe, while the yen lost some gains from Friday despite further verbal interventions from Tokyo.

Analyzing Bitcoin’s Rebound: Genuine Recovery or Dollar Influence?

Despite Bitcoin's uptick over the weekend boosting short-term market sentiment, some analysts advise caution regarding the interpretation of this rally. Market technician Tony Severino pointed out that Bitcoin's recent higher high in October against the US dollar might represent a "B-wave" rally, boosted more by a weakening dollar than by actual strength in the cryptocurrency itself.

Cryptocurrencies, Federal Reserve, Dollar, Gold, Bitcoin Price, Investments, Markets, Cryptocurrency Exchange, Interest Rate, Price Analysis, Market Analysis BTC/GOLD Elliot Wave market cycle analysis. Source: Tony Severino/X

Severino's analysis of the BTC/gold ratio suggested a peak in March 2025 near 46, followed by a corrective phase expected to bottom out around December 2025 and January 2026, which aligns with Bitcoin's halving cycles. He indicated that the declining ratio points to Bitcoin underperforming compared to gold, meaning the upside in BTC/USD might be masking underlying weaknesses.

Regardless, Bitcoin’s ability to recover to the mid-$80,000s amidst a strengthening dollar presents traders with a technical opportunity until market volatility and uncertainty from the Fed stabilize, paving the way for the next significant movement.

Related: Bitcoin climb to continue as selling pressure eases: Analysts