Bitcoin Drops Below 200-Day Average as Dollar Strength Pressures Crypto Market
Bitcoin (BTC) fell below a key technical threshold on Wednesday, slipping under its 200-day simple moving average (SMA) of $109,380 as the U.S. dollar extended its rally to a three-month high. The largest cryptocurrency last traded around $109,950, down roughly 2% in the past 24 hours, signaling mounting downside momentum.
The move came as the dollar index (DXY) climbed to 99.72, its strongest reading since early August, fueled by hawkish comments from Federal Reserve Chair Jerome Powell and dovish remarks from the Bank of Japan that sent the yen lower. Traders now see limited chances of an additional U.S. rate cut in December, tempering risk appetite across markets.
The breakdown below the 200-day SMA is viewed by analysts as a bearish signal that could invite further selling from technical traders. If bitcoin fails to recover this level, downside targets near $100,000 could come into play, according to CoinDesk Research’s technical model.
Bitcoin’s weakness came despite a rare positive development in macro conditions. U.S. President Donald Trump and China’s President Xi Jinping reportedly reached an early-stage deal to cut tariffs — lowering U.S. duties on Chinese goods from 57% to 47% — while Beijing pledged to increase imports of U.S. agricultural goods and secure rare earth supplies. However, the market response was muted, underscoring weak demand for risk assets.
Broader cryptocurrencies also faced pressure. XRP (XRP) traded near $2.50 and appeared on track to form a “death cross” between its 50- and 200-day moving averages, signaling potential further weakness. Solana (SOL) retreated to $186.36 despite initial optimism around the debut of Bitwise’s SOL spot ETF.
Analysts said that for now, bitcoin remains under macro-driven pressure. “The strengthening dollar and elevated Treasury yields are keeping investors cautious,” said one strategist. “Unless BTC reclaims $110,000 decisively, technical traders may continue to sell into strength.”
