- DXY fell to 98.50 after weak jobs data and political turmoil intensified Fed rate-cut expectations.
- Bitcoin rebounded to $115,000, approaching EMA resistance, with RSI recovery signaling improved momentum.
- Crypto markets strengthened as dollar weakness increased speculation of further monetary easing and Fed-driven liquidity support.
The U.S. Dollar Index (DXY) is sliding hard, dropping to around 98.50 after a disastrous jobs report and a political shake-up in Washington have traders convinced that Federal Reserve rate cuts are coming soon. The weak dollar has provided a direct boost to Bitcoin, which is now attempting to reclaim the key $115,000 level.
The dollar’s sell-off was kicked into high gear by the July nonfarm payrolls report, which showed just 73,000 jobs were added; well below forecasts. Making matters worse, the previous two months’ figures were revised down by a massive 258,000 jobs.
The sell-off deepened following President Trump’s dismissal of Bureau of Labor Statistics Commissioner Erika McEntarfer and the unexpected resignation of Fed Governor Adriana Kugler.
Related: Trump to Name New Fed Governor After Kugler Resigns; BLS Head is Fired
These developments unsettled markets and drove the dollar to its sharpest single-day loss since April. By Monday, the index showed signs of stabilizing but remained subdued, trading under pressure amid persistent uncertainty.
From a technical standpoint, the DXY remains stuck below the key resistance level of 98.50. Analysts are watching to see if it breaks lower, which could open the door to a further slide toward the 97.50 area.
Bitcoin Rebounds to $115,000 as RSI Recovers and Price Nears Key EMA Resistance
As the dollar weakened, Bitcoin found its footing, climbing to around $114,916 after a strong overnight session.
The 4-hour chart shows BTC bouncing from a recent low near $112,000, with buying volume picking up. The price is now approaching its immediate resistance, the 50-period exponential moving average (EMA) at $115,672.
The RSI, a key momentum indicator, has bounced hard from the “oversold” level of 30 and is now back to a neutral 50.84. This shows that the intense selling pressure from earlier in the week has eased for now. If Bitcoin can break and hold above the EMA, its next target would be the resistance level near $118,000, seen during late July highs.
Related: Bitcoin Price Chart Dropped 4%, But On-Chain, Holder Demand Is Up 160,000 BTC
Volume data also signals increased activity during the recovery, reinforcing short-term bullish sentiment. However, failure to reclaim the EMA may keep BTC range-bound between $112,000 and $115,000, as traders await further confirmation from macroeconomic factors and dollar movements.
Bitcoin vs. DXY Inverse Correlation in Full Effect
The broader crypto market also benefited from the growing expectation of easier money from the Fed, with Ethereum, XRP, and other major altcoins posting gains. Bitcoin’s price action remains closely tied to the dollar’s, as a weaker DXY historically coincide with stronger crypto performance.
Traders are now eager to find out if the U.S. dollar were to break down further or stabilize.
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