Bitcoin is holding near $86,000 despite a sharp rise in the U.S. dollar and higher Treasury yields, two factors that can weigh on risk assets. Weakness in the euro, meanwhile, has helped push the dollar higher as fiscal concerns in France and political uncertainty in Spain grow.
Currency markets typically move more gradually than stocks or cryptocurrencies, but monetary-policy shifts and changing investor confidence can still produce rapid moves.
The U.S. Dollar Index (DXY) climbed to roughly 102.5 on Monday, its highest level in nearly 18 months. The index has advanced from around 99 in early September and is now trading well above its 200-day moving average, which is also near 99. The move indicates that bullish momentum in the dollar is strengthening.
A stronger greenback can weigh on risk assets by making dollar-denominated debt more expensive for borrowers outside the U.S. It also reduces the purchasing power of overseas investors. When accompanied by rising U.S. rates, the dollar’s appeal increases further because cash and government bonds offer more competitive returns relative to equities and bitcoin.
The Federal Reserve’s September decision to raise rates by 25 basis points to 3.75%-4% has provided additional support for the dollar. Markets are pricing in more tightening, with a 4.5%-4.75% policy range seen as the most likely outcome by June 2027.
Higher Treasury yields are adding to the pressure as investors assess inflation risks, government borrowing and the sustainability of U.S. fiscal policy. Long-term Treasury yields have reached levels last seen more than two decades ago.
Euro weakness is another key factor behind the DXY’s rise. The euro makes up 57.6% of the dollar index and has fallen toward $1.12, its lowest level in 17 months. Concerns over public finances and political stability have weighed on the currency.
France is facing greater scrutiny over its deficit and borrowing costs ahead of next year’s presidential election. Spain has also entered a period of heightened uncertainty after Prime Minister Pedro Sánchez called a snap election for Nov. 29.
Bitcoin has so far shown limited reaction to the tougher macro backdrop, continuing to trade around $86,000 after a strong start to October.
