Bitcoin holds $86,000 as dollar strengthens and European risks mount

Major currencies typically move less sharply than stocks or cryptocurrencies, but shifts in monetary policy and investor confidence can trigger explosive moves.

The U.S. Dollar Index (DXY), which measures the dollar against a basket of six major currencies, reached roughly 102.5 on Monday, its highest level in nearly 18 months. Having climbed from around 99 in early September, it is now comfortably above its 200-day moving average, also near 99, a signal of strengthening bullish momentum.

A stronger dollar typically creates headwinds for risk assets by increasing the cost of servicing dollar-denominated debt outside the U.S. and reducing overseas investors’ purchasing power. When accompanied by higher U.S. interest rates, it also makes cash and government bonds more attractive, raising the hurdle for investing in stocks and bitcoin BTC$86,077.22.