Author: Big Smokey, CoinTelegraph; Compiled by: Five Baht, Golden Finance

The U.S. dollar index (DXY) chases new highs as U.S. Treasury yields rise and investors worry about the Federal Reserve’s monetary plans, cryptocurrencies Markets plummeted for the second day in a row.

While the U.S. dollar index opened the week down 0.92% ahead of Bitcoin’s sudden rally to $102,000, the index later reversed course to reach 109.37, its highest level since November 2022.

The market also reacted negatively to the surge in U.S. Treasury yields, with the 10-year yield above 4.7% and the 30-year yield rising to 4.93%. While the catalysts for rising yields are diverse and complex, they essentially reflect market participants' concerns that inflation will remain elevated as President-elect Donald Trump's economy threatens to expand deficits.

In short, markets are beginning to price in the possibility of an increase in U.S. long-term debt, and incoming Trump's policies are expected to drive up inflation even as they boost economic growth.

As expected, Bitcoin prices reacted negatively to the strength in the U.S. dollar index, with analysts worried that yield curve control will become a hot topic again.

3-day chart of DXY vs. BTC. Source: TradingView

BTC fell to an intraday low of $92,500, with analysts warning that if support at $90,000 fails to hold, prices could continue to fall in the near term.

Biyond co-founder Burkan Beyli noted:

“If Bitcoin falls below $94,000, the next target within the next five weeks is $81,000. To move downward, Bitcoin Next week's close will have to be below $95,180. Next week, we have CPI, so the bears may show their cards. Overall, in the short term (4 to 5). "I am bearish on cryptocurrencies and then very bullish on cryptocurrencies as I expect a pullback in the U.S. dollar index after Trump takes office." Jamie Coutts, chief cryptocurrency analyst at Real Vision, seemed to agree with Beyli. , who believes the recent strength in the U.S. dollar index is less important than expected liquidity expansion and incoming Trump’s pro-crypto stance.