Bitcoin steadies near $88k as USD slides, but Gold and Silver continue to dominate

Bitcoin is holding steady at 88k, having recovered from a one-month low of 86k, but the upside appears limited despite the continued selloff in the USD. The softer dollar has helped underpin a modest risk-on tone across US equity futures, yet Bitcoin has struggled to attract meaningful inflows. 

USD falls to a four-month low 

The US dollar index has fallen to its lowest level since mid-September, pressured by multiple headwinds. These include renewed fears of a US government shutdown, a revival of the “sell America” trade following fresh tariff rhetoric from President Trump targeting South Korea and Canada, and speculation over a potential coordinated US-Japanese intervention to support the yen. Concerns over Federal Reserve independence have added to the bearish USD narrative, alongside speculation that Trump will replace Fed Chair Jerome Powell with a more dovish successor. 

Under normal circumstances, sustained USD weakness would be supportive for Bitcoin, which has often traded inversely to the dollar. However, this relationship has broken down. While the dollar index is down 1.7% so far this year, Bitcoin has gained just 0.4%, lagging behind US equities, with the S&P 500 up around 1.5%. Instead, investors have shown only real interest in allocating capital to precious metals. 

Gold and Silver hit record highs 

Gold and silver have surged from record high to record high, with gold reaching $5,100 and silver climbing to $112. Gold and silver are up 18% and 56% respectively this year, underlining strong demand for traditional safe havens amid policy uncertainty, geopolitical risk, and persistent doubts surrounding the US outlook. Precious metals are being treated as defensive hedges; in contrast, Bitcoin is experiencing an identity crisis, trading neither as a defensive hedge nor a full risk-on asset in this regime. 

Bitcoin shares some characteristics with gold as an alternative store of value, but it also remains more sensitive to liquidity conditions and shifts in risk sentiment. In the current environment, Bitcoin is caught between risk-on and risk-off regimes—benefiting from neither fully. 

FOMC rate decision 

Looking ahead, attention turns to the FOMC rate decision tomorrow. The Fed is widely expected to keep rates unchanged at 3.5%–3.75%, placing the spotlight firmly on Chair Powell’s press conference. A hawkish tone that pushes back against political pressure and defends the Fed’s independence could help stabilise the dollar in the near term. However, a more cautious Fed could also weigh on BTC and the precious metals Gold and Silver. 

BTC technical analysis 

BTC/USDT broke out of the rising wedge bearish reversal pattern, breaking below the rising trendline support, the 50 SMA and the 90k round number to a low of 86k. The price recovered from this level but continues to trade below this key support-turned-resistance zone, which, combined with the RSI below 50, keeps sellers hopeful of further downside. 

85K is the key support level. A break below here opens the door to a deeper selloff towards 80k and 75k, the 2025 low. 

Any recovery would need to push above the 90k level, the round number and 50 SMA to bring 95k into focus ahead of the 100k psychological level.