Bitcoin Price Outlook as US Dollar Index Hits 4-Year Low, Gold Soars

crispus
Updated
crispus

crispus

Markets Writer
Crispus is a seasoned Financial Analyst at CoinGape with over 12 years of experience. He focuses on Bitcoin and other altcoins, covering the intersection of news and analysis. His insights have been featured on renowned platforms such as BanklessTimes, CoinJournal, HypeIndex, SeekingAlpha, Forbes, InvestingCube, Investing.com, and MoneyTransfers.com.
Read full bio
Why Trust CoinGape
CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
Bitcoin Price Outlook as US Dollar Index Hits 4-Year Low

Highlights

  • Bitcoin price remained under pressure as gold jumped to a record high.
  • It wavered as the US Dollar Index (DXY) plunged to the lowest level in years.
  • Technical analysis suggests that the BTC price has more downside to go.

Bitcoin price was stuck in a narrow range today, January 27. It was trading at $88,000, down by 10% from its highest point this year. It has underperformed gold, which has pumped to a record high. Also, it has slipped even as the US Dollar Index (DXY) has slumped to a record low.

Bitcoin Price Slips as US Dollar Index Plunges and Gold Soars

The US Dollar Index, which tracks the performance of the greenback against a basket of currencies, tumbled to the lowest level in four years. It has plunged against all major currencies like the euro, sterling, British pound, and the New Zealand dollar.

The dollar plunged as Polymarket data showed that odds of a government shutdown rose to 80% today. This shutdown is being triggered by the ongoing crisis on ICE and Border patrol. Democrats have insisted that they will only provide votes to fund the government if it is accompanied by reforms.

The dollar index has also plunged because of the ongoing surge in public debt. Data shows that the debt has surged to over $38 trillion, and the deficit means that it will keep rising by over $2 trillion a year. In a recent statement, JPMorgan’s Jamie Dimon warned that the situation was not sustainable.

These events have led to the ongoing gold price surge, which has pushed it past $5,000. Central banks and companies like Tether have continued buying gold, while the popular GLD and IAU ETFs have accumulated gold assets worth billions of dollars in the past few months.

In a recent interview, Tom Lee believes that Bitcoin and other cryptocurrencies are underperforming because investors have turned to the booming gold, silver, and stock market. He believes that historically, a surge often leads to strong gains in precious metals often leads to higher crypto prices.

He also blamed the performance to the ongoing deleveraging as evidenced by the falling futures open interest. Data shows that Bitcoin’s open interest has dropped from over $90 billion in October last year to below $50 billion today. 

The next major Bitcoin news to watch will be the upcoming Federal Reserve interest rate decision. In theory, a dovish Fed should be highly bullish for Bitcoin and the crypto market.

BTC Price Outlook: Technical Analysis

Technical analysis suggests that Bitcoin price may have a strong bearish breakout soon. It is in the process of forming a bearish flag pattern, which is composed of a vertical line and an ascending channel.

Bitcoin Price Chart
Bitcoin Price Chart

BTC value has remained below all moving averages and the Ichimoku cloud indicator. Therefore, the most likely forecast is where it continues falling, with the next key target being at $80,480, its lowest level in November last year. A bearish breakout will then be followed by a rebound as Tom Lee expects.

Advertisement

Frequently Asked Questions (FAQs)

1. What is the most likely Bitcoin price outlook?

The most likely Bitcoin price forecast is bearish as it has formed a bearish flag pattern on the daily chart.

2. Is BTC a good coin to buy today?

History shows that Bitcoin always rebounds after plunging into a bear market. Therefore, the coin will likely remain under pressure in the near term and then rebound later this year.

3. What next for Bitcoin prices?

The most likely scenario is where Bitcoin continues falling, potentially to the key support at $80,000, and then bounce back later this year.
coingape google news

Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

BTC

Bitcoin

$88,388.2067 0.82% (24h)

24 Hours volume

$25.91B

Market Cap

$1.77T

Max Supply

21M

Buy $BTC with MEXC
About Author
About Author
Crispus is a seasoned Financial Analyst at CoinGape with over 12 years of experience. He focuses on Bitcoin and other altcoins, covering the intersection of news and analysis. His insights have been featured on renowned platforms such as BanklessTimes, CoinJournal, HypeIndex, SeekingAlpha, Forbes, InvestingCube, Investing.com, and MoneyTransfers.com.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.