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Bitcoin price fell 7% to $83,237 in the past 24 hours, with JP Morgan analysts explaining that the cryptocurrency’s recent weakness is due more to short-term market sentiment and liquidity conditions than the recent decline in the US dollar.
Despite the dollar’s weakness, Bitcoin failed to stage a typical counter-rally, highlighting its current behavior as a risk-sensitive asset rather than a traditional hedge against currency weakness.
JPMorgan analysts note that the U.S. dollar’s recent decline has been driven primarily by changes in near-term capital flows, tariffs and investor sentiment rather than meaningful changes in growth prospects or the Federal Reserve’s policy outlook.
Although the dollar index (DXY) is down about 10% over the past year, strategists point out that the interest rate differential has actually shifted in favor of the U.S. since the beginning of the year. This suggests that the dollar’s weakness may be temporary, similar to the brief decline in April, and is expected to stabilize as the US economy begins to recover.
A weak dollar isn’t boosting Bitcoin’s gains, but JPMorgan says there’s a reason for that.
The Dollar is Down, but Bitcoin is Down: JPMorgan Identifies a Structural Shift in Cryptocurrency Correlation. Historic ‘digital gold’ narrative challenged as traditional safe-haven behavior disappears…
— Dr. Efi Pylarinou (@efipm) January 29, 2026
Bitcoin is still tied to risk sentiment.
JPMorgan argues that Bitcoin’s underperformance highlights how investors currently perceive the asset. Instead of functioning as a store of value like gold, Bitcoin continues to trade in line with broader risk sentiment and global liquidity trends.
This became clear after the Federal Reserve kept interest rates on hold and Chairman Jerome Powell maintained a hawkish stance that weighed on risk assets, including cryptocurrencies. In contrast, gold and other real assets have rebounded strongly, leveraging their established role as macro hedges amid the dollar’s weakness.
JPMORGAN: #Bitcoin Dollar index fails to rebound despite 10% drop
JPMorgan Private Bank said the U.S. dollar index has fallen 10% over the past year. #Bitcoin It broke that with a 13% drop. #normal times Inverse correlation with dollar weakness. Analysts say the dollar… pic.twitter.com/yfmQU6uiEv
— CryptOpus (@ImCryptOpus) January 29, 2026
Going forward, JPMorgan expects Bitcoin to lag traditional inflation and currency hedges until macro fundamentals, such as growth expectations or changes in interest rate dynamics, take over. For now, BTC’s upward momentum continues to be limited by declining trading volume and the upcoming expiration of cryptocurrency options.
Bitcoin Breaks Key Support at $85,000 as RSI Signals Oversold Levels
Bitcoin price has fallen below the key support around $85,000, signaling a bearish breakout on the 4-hour chart. This move follows a period of sideways consolidation within this key area of support, indicating that previous levels of buyer interest have not been maintained. This breakout resulted in a sharp drop in price to $83,397, highlighting increased selling pressure in the near term.
The relative strength index (RSI) fell to 23.27 and entered oversold territory. This suggests that while sellers are dominant, the market can expect a temporary relief rebound or consolidation. However, the prevailing trend remains bearish until support levels are restored. Historically, similar breakouts below key support levels have often accelerated the downtrend. This means traders should watch out for further declines.
BTCUSD chart analysis. Source: TradingView
Bitcoin faces short-term downside
Resistance due to previous price congestion is seen near $87,500-$88,000, which could act as a short-term upper limit if a corrective bounce occurs. The chart also shows a long-term price target above $95,000, but reaching this level would require a significant reversal of momentum and recovery of previously lost support.
For now, the combination of a bearish breakout, oversold RSI, and failure to hold support highlights that Bitcoin is vulnerable to further declines in the near term, while any bounce could come under strong selling pressure.
Overall, the technical situation is favorable for sellers, with key support zones now serving as potential reference points to monitor market reaction. Traders should watch RSI recovery signals and price action around broken support lines to identify potential reversal opportunities or continuation of the downtrend.
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