The US dollar remains strong, traditional markets cautious: Is Bitcoin facing a new test after breaking through?

Bitcoin (BTC) has demonstrated resilience in this week’s trading, currently stabilizing above $90,000, with a clear rebound from the weekly low of $80,600. However, this upward movement is not solely driven by buying pressure within the cryptocurrency market itself but is closely related to the abnormal performance of the US dollar index (DXY) in traditional markets. As the dollar firmly holds the 100 level and approaches a six-month high, traders need to assess whether this rebound truly signals economic recovery or is merely a “false prosperity” under the strength of the dollar.

Strong Non-Farm Payroll Data, Federal Reserve Policy Outlook as a Variable

The key trigger for the dollar index’s strength appeared on November 20th with the release of US Non-Farm Payrolls (NFP). The report showed an increase of 119,000 jobs, far exceeding market expectations of 53,000. This data immediately shook global financial markets upon announcement.

On the surface, strong employment figures should support economic growth, but the chain reaction introduces complex variables. The dollar index surged above 100, hitting a six-month high, and market expectations for Federal Reserve policy adjustments also shifted. On Friday, New York Fed President John Williams expressed a dovish stance, suggesting that rate cuts could still be possible in the short term and highlighting that labor market weakness, rather than inflation, could pose a greater risk.

These comments temporarily boosted market bullish sentiment. According to CME Group’s latest forecast, the probability of a 0.25% rate cut in December has risen to 78.9%, a significant jump from 44% a week earlier. However, Boston Fed President Susan Collins quickly stated that no decision has been made, and internal policy disagreements within the Fed are gradually intensifying. This uncertainty presents an invisible risk for traders.

Market Divergence Under the Strengthening Dollar

As the dollar remains strong, other assets in traditional markets show divergent trends. The dollar against the euro and pound has experienced slight gains, while the yen has retraced some of its Friday gains following verbal interventions by Tokyo authorities. This adjustment in global capital flows directly influences asset allocation decisions of international investors seeking safe havens and returns.

In this macro environment, Bitcoin’s rebound from $80,600 to over $90,000 appears to regain strength, but its fundamental drivers warrant deeper analysis.

Technical Warnings: Contradictions Between Rebound and Structural Performance

Market analyst Tony Severino offers a different perspective on Bitcoin’s rebound. Using Elliott wave analysis of the BTC/gold ratio, Severino suggests that recent gains may merely be a “Wave B” correction, driven mainly by expectations of a weakening dollar rather than intrinsic investment appeal of cryptocurrencies.

More importantly, the trend of the BTC/gold ratio warrants attention. Severino predicts that this ratio will reach a cycle high of about 46 around March 2025, followed by a correction phase, with lows expected between December 2025 and January 2026—timing that coincides with Bitcoin’s halving cycle. This implies that even if BTC/USD continues to rise nominally, Bitcoin’s performance relative to gold could continue to decline, reflecting structural disadvantages.

In other words, Bitcoin’s rise amid a strengthening dollar may mask its relatively poor performance. This “seemingly strong but actually weak” state poses risks for both long-term holders and short-term traders.

Trading Opportunities and Risks Coexist

Despite these concerns, Bitcoin remains above $80,000 in a strong dollar environment, creating a trading window for technical traders. Market volatility persists, and Fed policy uncertainty remains unresolved. Traders should seize this opportunity but stay vigilant.

In the short term, whether Bitcoin can break through key resistance levels depends on the Fed’s December policy decision, market volatility trends, and whether the dollar’s strength can be sustained. As traditional markets cautiously begin a new cycle, cryptocurrency traders need to monitor macroeconomic expectations and technical signals simultaneously to avoid being misled by superficial rebounds.