Bitcoin’s Rebound: A Deceptive Strength or a Genuine Recovery?
Bitcoin (BTC) has managed to hold above $86,000 on Monday, following a steady recovery over the weekend from Friday’s low of $80,600, its lowest price since April. This rebound occurred as traditional markets opened the week with caution, with the US Dollar Index (DXY) remaining steady above 100, hovering near a six-month high.
The US Dollar Index held firm above 100 after a surprising Nonfarm Payrolls (NFP) print of 119,000, exceeding the expected 53,000. This strong jobs report injected fresh tension into the markets, signaling economic resilience and potentially dampening rate-cut expectations. However, the impact was mixed, with the US Dollar Index still holding firm above 100, while traders recalibrated the Fed’s next steps.
Fed Uncertainty and Its Impact on Bitcoin
The Federal Reserve’s uncertainty regarding interest rate cuts has contributed to the mixed market sentiment. On Friday, New York Federal Reserve President John Williams suggested that a near-term rate cut is still possible, citing labor-market softness as a greater risk ahead. In contrast, Boston Fed President Susan Collins stated that she remains undecided, highlighting the Fed’s deepening policy divide.
According to data from the CME group, the probability of a 0.25% December rate cut is currently at 78.9%, sharply higher than the 44% predicted a week prior. This shift in expectations has contributed to the caution in traditional markets, with the dollar edging higher against the euro and sterling as European fiscal stress intensifies.
The Fed Reserve’s interest rate cut expectation for December, as predicted by the CME group, has significant implications for Bitcoin’s price. While the cryptocurrency has rebounded steadily over the weekend, some analysts caution against misreading the bounce, suggesting that it may be a “B-wave” rally amplified by a weakening dollar rather than genuine crypto strength.
Bitcoin’s Rebound: Real or Deceptive Strength?
Market technician Tony Severino noted that Bitcoin’s recent higher high in October against the US dollar may be a deceptive strength. Severino’s BTC/gold ratio chart points to a cycle peak in March 2025 near 46, followed by a corrective phase bottoming around December 2025 and January 2026, aligning with Bitcoin’s halving cycles. The declining ratio implies that Bitcoin is underperforming gold, meaning that the BTC/USD upside may be masking structural weakness.
Despite this, Bitcoin’s ability to reclaim the mid-$80,000s amid a firmer dollar offers traders a technical window until volatility and Fed uncertainty settle. As the cryptocurrency market continues to navigate the complex landscape of macroeconomic surprises and Fed policy decisions, investors must remain cautious and conduct thorough research before making any investment decisions.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
