Bitcoin’s rebound capped by a stronger dollar… “Rebound momentum fading within the $75k–$80k range”

Bitcoin (BTC) has entered a consolidation phase after a sharp drop, but renewed dollar strength is raising doubts about the scope for a meaningful rebound.

According to CoinDesk on the 3rd (local time), bitcoin has stabilized over the past 24 hours in the $75,000–$80,000 range, halting its decline. Some in the market are citing futures position unwinds and a technical bounce as grounds for the possibility of reclaiming the upper end of $80,000.

Still, as the dollar regains strength, concerns are growing over the durability of a medium-term rebound. The U.S. Dollar Index (DXY), which measures the dollar’s value against major currencies, has risen 1.5% over the past two days to 97.6—its largest two-day gain in nine months.

In general, a stronger dollar tends to weigh on dollar-denominated assets such as bitcoin. When the dollar rises, the relative appeal of holding risk and alternative assets—such as bitcoin, gold, and commodities—declines, and global financial conditions tend to tighten.

Market participants are pointing to developments around Federal Reserve (Fed) leadership as a key driver of the dollar’s recent bounce. After U.S. President Donald Trump nominated Kevin Warsh as a candidate for the next Fed chair, expectations for earlier rate cuts have partially receded. Warsh has previously been viewed as hawkish during his tenure as a Fed governor.

In a recent report, ING said the “debasement trade” that had driven the dollar lower last week is being unwound following Warsh’s nomination, adding that “the dollar appears to be entering a near-term recovery phase.” It also cited as a variable the postponement of scheduled U.S. employment data releases due to a government shutdown, which could increase dollar volatility going forward.

Matthew Ryan, head of strategy at FXStreet, also noted that while Warsh has recently made remarks agreeing on the need for rate cuts, “given his past leanings, he is relatively unlikely to advocate aggressive easing,” adding that “there is room for the dollar rebound to extend further.”

Many in the market believe bitcoin will struggle to break out of its range until the dollar’s trajectory clearly turns. While a short-term technical rebound remains possible, analysts say it is uncertain whether it can develop into a sustained uptrend amid a stronger dollar and macro headwinds.