The strengthening of the US dollar suppresses Bitcoin's rebound, and Middle East conflicts may trigger a price decline

March 6 News: As tensions in the Middle East continue to escalate, the US dollar has strengthened significantly this week, raising concerns in the market about high-risk assets such as Bitcoin and altcoins. TradingView data shows the US Dollar Index (DXY) quickly rose from 97.8 to over 99, a strong trend that may limit capital inflows into the crypto market.

IG market analyst Tony Cicamore pointed out that if geopolitical conflicts persist, they could lead to high inflation pressures and a stronger dollar, while reducing the likelihood of the Federal Reserve cutting interest rates. In this environment, Bitcoin’s upward momentum may be restrained. The FedWatch report indicates a nearly 97.4% chance that the Federal Reserve will keep interest rates unchanged at the March meeting, further strengthening the dollar and reducing market risk asset allocations.

Although Bitcoin has recently rebounded, it still faces multiple resistances. CryptoQuant’s latest report shows that Bitcoin’s bull market score is only 10/100, indicating the overall market remains weak. At the same time, institutional selling pressure cannot be ignored. Galaxy Digital sold over 3,100 Bitcoin in recent days to lock in profits, demonstrating that some institutional investors remain cautious about the current rally.

Bitcoin veteran Lucky stated that the strengthening dollar and interest rate expectations have a significant impact on market sentiment, tightening the flow of funds into risk assets, and the crypto market faces a correction risk. Historical data shows that when the dollar strengthens and market risk sentiment rises, Bitcoin often experiences false breakouts, with short-term gains quickly reversing.

Overall, Middle East geopolitical tensions and a strengthening dollar are key factors suppressing Bitcoin’s continued rise. The market should remain alert to any sudden events that could trigger a price reversal. In the short term, Bitcoin may continue to face pressure, and investors should monitor dollar trends and institutional selling activity to assess potential risks and trading opportunities.