Bitunix Analyst: The US dollar pricing power swings between policy credibility and the outcome of conflicts, as the market enters a phase of risk reallocation dominated by exchange rates.

Mars Finance News, April 21 — The market has begun trading the “conditions for dominance to end.” Trump explicitly compressed the ceasefire time window while maintaining the Strait of Hormuz blockade as a bargaining chip, turning energy supply risks into negotiation tools; however, internal divisions within Iran over negotiation stances have made it difficult to form a consensus path in the short term. This causes geopolitical risks to shift from a single event to variables that generate ongoing impact expectations.

Against this backdrop, the core driving logic of the dollar has shifted: no longer limited to interest rate differentials and safe-haven demand, but focusing on the comprehensive pricing of “policy credibility and liquidity pathways.” On one hand, Wosh released a clear hawkish underlying framework before the hearing, emphasizing “maintaining independence and sticking to inflation,” effectively denying the possibility of aggressive rate cuts in the short term, which provides structural support for the dollar; on the other hand, political pressure to cut rates persists, and the market is still trading the potential path of “balance sheet contraction hedging rate cuts,” causing the dollar to lack a unilateral trend and instead enter a volatile range.

Structurally, DXY has fallen back from the rebound high (around 100.5) and is currently oscillating near 98, entering a short-term weak consolidation, but the range of 97.4–97.0 below still shows clear support. This indicates that the market has not fully shifted to risk appetite but is reassessing “whether the dollar still has safe-haven and interest rate advantage.” In other words, the dollar is not currently turning bearish but is in a “pricing divergence phase” — constrained above by policy-led and rate cut expectations, and supported below by war and inflation.

This dollar structure directly impacts the operation mechanism of the crypto market. BTC is currently testing around 76K repeatedly, with the key support zone at 72.5K, and overall still within a liquidity redistribution range. The “non-trending but highly volatile” characteristic of the dollar will amplify false breakouts and liquidity harvesting behaviors in BTC, rather than driving a unilateral trend.

The key lies in two potential future paths for the dollar: if the war escalates and energy inflation persists, the Fed will be forced to maintain high interest rates, causing the dollar to strengthen again, with the upper liquidity zone for BTC (77K–78K) more likely to become a trap for longs; conversely, if negotiations progress and the Strait of Hormuz resumes navigation, inflation expectations fall, and the market re-prices rate cuts, the dollar will weaken, and BTC will have the conditions to break through high liquidity levels and extend gains.

In summary, the current market main theme has shifted from “the risk event itself” to “how the dollar prices these events.” Until the dollar forms a clear direction, the crypto market will essentially maintain range-bound oscillation, driven by liquidity rather than trend.