Bitcoin Faces 10% Pullback as Dollar Index Drops 2%

Crypto analyst Axel Adler Jr. has identified a notable trend in the Bitcoin market, suggesting a potential short-term corrective move. Following an uptrend on 12 June 2025, Bitcoin experienced a significant soft reversal due to substantial short volume and long liquidation. Despite positive funding rates, the open interest is declining. Adler's analysis of the dominance ratio chart indicates that Bitcoin may face a pullback or consolidation below the $108K mark. Traders should anticipate a temporary pause in the rally as long as Bitcoin's price remains below this level.

The chart analysis reveals a closure of long positions and an increase in short positions, accompanied by a decline in Bitcoin's price. This trend suggests heightened market volatility and potential corrections. Bitcoin may test lower support levels before reaching new highs. Unless the rally can sustain support at $108K, a major correction could push Bitcoin to lower price levels.

In parallel, the Dollar Index (DXY) has slipped below 98.2, marking its lowest point since early 2022. This decline follows U.S. President Donald Trump's threat to impose new tariffs, escalating global trade tensions. The market remains uncertain despite Treasury Secretary Scott Bessent's indication that the 90-day truce may be extended. The weaker-than-anticipated May CPI report has reinforced market speculation that the Federal Reserve may cut rates in September. Investors are closely monitoring the upcoming Producer Price Index (PPI) report for further insights into inflation and U.S. monetary policy.

The weakening dollar, coupled with global trade tensions and inflationary pressures, is impacting market dynamics. Adler Jr. notes that the focus is now on the PPI report, which could provide crucial information about future inflation trends and guide the Federal Reserve's interest rate decisions. The PPI report's outcome may influence consumer sentiment and overall market attitudes, potentially leading to diversification into commodities and cryptocurrencies if the dollar continues to weaken. Conversely, signs of inflationary pressures could prompt the Federal Reserve to tighten monetary policy, boosting the dollar and altering market dynamics.

As the market awaits key economic data, particularly the PPI report, uncertainty prevails. Bitcoin's short-term consolidation and the dollar's struggles with trade tensions and inflationary pressures are closely monitored. The upcoming economic data and global trade developments will be pivotal in determining future market trends, influencing both cryptocurrency and traditional financial markets. The market's direction will depend on whether the dollar can recover or if Bitcoin can sustain its bullish momentum.