Bitcoin Faces New Lows Amid US Dollar Strength and Geopolitical Tensions

Bitcoin (BTC) experienced renewed downward pressure on Thursday, with prices dropping to around $66,200 as the US dollar index (DXY) showed signs of strength. The decline came amid geopolitical tensions following US President Donald Trump's address to the nation, which left the door open for further escalation with Iran. Markets had initially anticipated de-escalation, but Trump's comments instead heightened uncertainty, affecting risk assets like Bitcoin, stocks, and gold. The US dollar index, which has traditionally moved inversely to Bitcoin, rebounded to the key 100 level. Analysts noted that DXY is poised for a breakout, with trader Aksel Kibart suggesting a potential target of 104, its highest level since April 2025. This dollar strength, coupled with rising oil prices above $100 per barrel, has intensified pressure on crypto and other risk assets. Bitcoin's price action has mirrored a bear flag pattern observed at the start of 2026, raising concerns about a potential breakdown. Keith Alan, co-founder of Material Indicators, highlighted that BTC/USD lacks directional momentum, with price movements closely resembling previous bearish trends. The market remains in a state of heightened volatility, with investors closely monitoring key support levels. As the dollar gains strength, traders are bracing for further declines in Bitcoin and other risk assets. The Kobeissi Letter described Trump's address as 'incredibly puzzling,' noting its potential to agitate markets further. With uncertainty persisting, the crypto market faces renewed challenges as it navigates the interplay between geopolitical tensions and dollar dynamics.