The rebound of DXY has led to a tightening of global liquidity, putting downward pressure on risk assets such as BTC.

With the recent strength of the US dollar -- the US dollar index (DXY) rose to 101 dollars, the global liquidity situation is tightening, and risk assets like Bitcoin are under pressure.

Earlier this week, the world's largest cryptocurrency experienced a strong rebound, and BTC also reached a new high of over $126,000, but then it underwent a significant correction. Meanwhile, this morning, the price of BTC even dropped to as low as $102,000.

Market analyst Jamie Coutts pointed out that the decline in Bitcoin is due to macro pressures rather than internal weakness. He stated on platform X that the dollar index (DXY), after experiencing its largest drop in decades, is currently rebounding to the key resistance range of 100-101 dollars.

Recently, the strengthening of the dollar is squeezing global Liquidity, which is also putting short-term pressure on risk assets such as BTC. Kutz reminded that if the dollar continues to strengthen, risk assets will face greater pressure; if the dollar index falls back, the combination of Liquidity easing and economic recovery is expected to allow risk assets to continue their upward trend before mid-2026.

According to a report released by CryptoQuant at the end of last month, the direction of Bitcoin in the coming weeks may depend on the liquidity between the Asian and American markets. If the Coinbase premium index remains moderately positive, it indicates that institutional demand in North America is relatively solid; meanwhile, the Korean "kimchi premium" has only slightly increased, showing that Asian retail investors are not yet blindly chasing prices. Adding both factors together, Bitcoin is still in a state of weak supply and demand balance.

On-chain data also depicts a balanced picture. As market observer Axel Adler pointed out on X, the Puell multiple is 1.1, and the Bitcoin price is close to $121,600, slightly above the average earnings level of miners.

Adler also stated that the current market poses no risk of surrender and is not as overheated as during the peak of the cycle, describing the current situation as "neutrally bullish."

According to the latest market data from CoinGecko, at the time of writing this article, the trading price of BTC is $112,476, down 7.3% in the past 24 hours, and the weekly increase has fallen to 0.1%.

Overall, although the rebound of the US dollar index has temporarily cooled the crypto market, most analysts believe that the easing of liquidity and improvement in the business environment will keep the entire crypto market optimistic before mid-2026.

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