Fed Holds Rates Steady, DXY Surges — Bitcoin Wavers Amid Uncertainty

The dollar is roaring, and Bitcoin is taking a hit. That’s the scenario taking shape as the U.S. Dollar Index (DXY) climbs past 99.98 points, reaching its highest level in two months. This upward move coincides with the Federal Reserve’s decision to keep interest rates unchanged—a strong signal to markets, though not necessarily a favorable one for Bitcoin.

A Static Fed, a Rising Dollar

Against all expectations, the Fed has resisted political pressure. Despite mounting calls for rate cuts—particularly from former president Donald Trump, whose net worth has surged to $620 million—Jerome Powell remains unmoved. Interest rates stay locked between 4.25% and 4.50%, with a notably cautious tone: inflation remains somewhat elevated, and the 2% target is still the goal.

In this context, the DXY surges. This isn’t just a technical bounce—it’s a powerful resurgence of the dollar amid a backdrop of macroeconomic uncertainty. As often happens, perceived monetary stability in the U.S. acts as a magnet for capital. And when the dollar strengthens, Bitcoin struggles.

Bitcoin vs. DXY: A Longstanding Monetary Rivalry

This isn’t the first time Bitcoin and the dollar have moved in opposite directions. Historically, the DXY serves as a reverse barometer for risk assets—with Bitcoin leading the pack.

When the greenback climbs, investors tend to retreat from crypto. That dynamic held true once again: BTC briefly dipped to $115,760 before recovering slightly. A full breakdown of this movement is available in the analysis published by BeInCrypto.

Yet this correction, though mild, speaks volumes. Bitcoin’s resilience isn’t infinite—especially in the face of a DXY that could aim for 101 points in the near term, according to well-known macro strategist Michael J. Kramer. The market is anticipating. And the algorithms already know: a strong dollar often spells trouble for crypto.

What Future for Bitcoin in a Pro-Dollar World?

The real question isn’t whether Bitcoin will falter—but how long it can hold on. Because fundamentally, nothing has changed for BTC. The supply remains limited. Institutional demand is still present, albeit cautious.

What’s shifting is the global backdrop. If the Fed continues its rate freeze and the DXY keeps climbing, a bullish BTC scenario with a breakout toward $150,000 becomes less likely in the short term.

Still, crypto is far from dead. It adapts. It absorbs shocks. And sometimes, it even thrives on monetary uncertainty—repositioning itself as an alternative asset. What could ultimately favor Bitcoin is an unexpected deterioration in the job market or a sudden stock market pullback—factors that might force the Fed to change course.