Today’s Market Update: Dollar Resistance, TLT and Bitcoin’s Retracement Setup
Today I want to focus on two things: where the dollar may be heading and why I continue to believe Bitcoin can experience a meaningful retracement without invalidating the bullish setup.
I’ve been spending more time looking at Forex because my macro framework always begins with the dollar. The DXY is currently grinding against its 200-week moving average, and while a lot of commentary is calling for a major dollar breakout, I continue to think the upside is becoming increasingly limited.
Taking a Tour Through the DXY
Rather than looking only at the DXY itself, I went through several of the currencies that make up the index to see whether they tell the same story.
The euro, which represents the largest component, is approaching its own major long-term support and 200-week moving average. That suggests the dollar may still have a little room to strengthen, but probably not an unlimited amount.
The yen is telling a similar story. We are again approaching areas where previous weakness in the yen triggered intervention. That creates another natural limit on how much additional dollar strength I would expect before pressure builds for a reversal.
The Swiss franc produces almost the same conclusion: the dollar can potentially push somewhat higher, but it is approaching the top of a multi-year structure and its 200-week moving average.
That gives me confluence across several currency pairs.
My working expectation is therefore a little more dollar strength, followed by a larger reversal lower. If that reversal eventually takes DXY toward roughly 93–94, I think it could provide another substantial tailwind for equities, crypto, and eventually precious metals.
Why I’m Still Buying TLT
I remain structurally bearish on long bonds over the very long term, but the current yield changes the trade for me.
With the 20-year above 5.5%, I am being paid enough to wait.
I initially bought TLT around $78, added around $77.60, and again around $77. I am not expecting it to immediately rocket higher. My expectation remains that it may chop for some time before eventually benefiting from either recession, a significant market selloff, or another flight to safety.
Meanwhile, I continue rolling shorter-duration Treasury holdings into the 5- and 10-year, where yields around 5% give me much more flexibility.
Bitcoin: A Pullback Is Not Automatically Bearish
I still have my small $81,000 short position, while my other three trading slots remain flat.
The reason is simple: I continue to expect a retracement.
Bitcoin moved from roughly $57,000 to $86,000 without a meaningful pullback. So the idea that falling below $83,000 would somehow invalidate the bullish case makes no sense to me.
A 28%–33% advance followed by more than a 5% retracement would be completely normal. Historical Bitcoin bull markets have experienced pullbacks of 50% or more without ending the larger bullish trend.
The more important levels are below:
$82,800 — breakout/support area
roughly $79,000 — 365-day moving average
roughly $78,000 — 50-week moving average
roughly $75,000 — 50% Fibonacci retracement, near the 21-week EMA
Any of those could produce a perfectly healthy bullish retracement.
If Bitcoin produces a slow, orderly pullback into those areas, I will likely close the short and begin adding longs.
What I still need before formally calling the bear market over is the same thing I’ve been waiting for all along: a higher low followed by a new higher high.
Ethereum and Solana
Ethereum has already found support where the previous flag intersects its 200-week moving average. Below that, I’m watching roughly $2,470, $2,400, and then the 50% retracement around $2,342.
Solana has potential support around $112, then roughly $107, with the broader 50% retracement near $100.
Those are still bullish retracement areas if buyers appear there.
Bottom Line
The currency markets are giving me increasing confluence that the dollar may have a little more upside, but not much, before running into substantial resistance.
That could line up very cleanly with a near-term crypto pullback followed by another push higher once the dollar reverses.
And for Bitcoin specifically, I do not consider a break below $83,000 bearish by itself.
A normal retracement toward $79K, $78K or even $75K could actually create the higher low I have been waiting for.
The real test comes afterward: can Bitcoin bounce from that retracement and make another higher high?
If it does, that is the confirmation I need.
