The US dollar index rebounded to 97.80; Bitcoin at $98,000 is the bull-bear dividing line | BTC price prediction

The US Dollar Index rebounded to 97.80 during the Asian early session on Tuesday, distancing itself from the low since July 28, as geopolitical risks drove safe-haven funds into the dollar. The market expects the Fed's rate cut probability in September to rise to 89%, limiting the upside potential of the dollar. Bitcoin is currently priced at $108,017, and Ostium Labs analysis points out that $98,000 is the bull-bear dividing line; if the weekly closes below this level, it will turn bearish. The technicals show that Bitcoin needs to hold the July low of $105,000, and ideally close September above the August opening price of $115,000 to lay the groundwork for a new high in October. The ISM Manufacturing PMI and non-farm payroll data will serve as short-term market indicators.

The US Dollar Index is supported by geopolitical risks, while the Fed's interest rate cut expectations suppress the rise.

The US Dollar Index (DXY) rose slightly to 97.80 in early Asian trading on Tuesday, after previously hitting its lowest level since July 28. The geopolitical tensions in Eastern Europe provided support, as Russian drone attacks damaged Ukrainian power facilities, leaving nearly 60,000 households without power, with Kyiv promising further retaliatory actions. These developments increased the inflow of safe-haven funds into the dollar, but investors are concerned that long-term instability may dampen overall market sentiment and growth prospects. The CME FedWatch tool shows the market pricing in a 89% probability of a 25 basis point rate cut in September, up from 85% before last week's PCE inflation data was released, with expectations of policy easing limiting the dollar's gains.

Key Technical Levels Concentrated The Dollar Index is in a Symmetrical Triangle Consolidation

Technical analysis shows that the US Dollar Index is trading around 98.19, rebounding from the support level of 97.54. The price is still compressed within a symmetrical triangle, with resistance around 98.71 and support stable at 97.54. The 50-day Exponential Moving Average (98.00) and the 200-day line (98.19) are converging, forming a technical pivot area that may determine the next move. The RSI has rebounded to 59, reflecting an improvement in momentum after oversold conditions earlier this week. A breakout above 98.71 could drive the price towards 99.12 and 99.54, while a drop below 97.54 would test 97.13 and 96.74.

Bitcoin $98,000 as the Bull-Bear Divide Monthly Closing Price is Crucial

Ostium Labs pointed out in its market outlook on September 1 that the upward trend of Bitcoin remains intact after a pullback in August, but $98,000 is the key red line: "A weekly close below $98,000 in this timeframe would turn the structure bearish," and "A weekly structure above $98,000 remains bullish, so a higher low should be expected." The agency cited a Bitcoin price of $108,017, with the August monthly line "firmly closing bearish," retreating to the support level of $108,200 after reaching a historic high of $124,500. The monthly chart shows no evidence of a 2021-style cycle top, although there are some momentum divergences in the RSI, the Awesome Oscillator continues to point to momentum accumulation.

Bitcoin Long and Short Critical Point Setting The September Closing Position Determines the Fourth Quarter Trend

The bearish scenario is only strengthened when September "closes below the 2025 Opening Price of $93,300 and thus below the local trend line support." For the bullish path, the team hopes that September finds support "above the annual Opening Price, but possibly higher near the July low of $105,000," ideally closing above $115,000 at the end of the month, which would prepare for a breakout high in October. The weekly structure has not shown bullish momentum, and the RSI has now reset towards 50, supporting trend continuation. If the market forms a higher low in early September and regains momentum, a weekly close above $112,000 will lead to a retest of the August Opening Price and $117,500.

Derivatives Clearing Heatmap Shows Distribution of Key Liquidity Areas

The daily time frame remains a recent obstacle, with Ostium describing the pullback as "orderly". The support level has turned into resistance during the decline, with the key level clearly being the historical high of $112,000, which acted as support in early August and then became resistance again during last week's drop. A breakout and close above the trend line and above $112,000 would indicate a bottom formation; a failed test—"leaving a long upper shadow above the $112,000 trend line and rejecting"—would tilt the price towards the June opening price of $104,500, with the 200-day moving average at $101,300 being a key demand level. CoinGlass liquidation heat map shows a dense liquidation band layered above the upper limit of $114,000 and gathering below the $120,000 area, with no significant levels in the downward direction.

Macroeconomic Data Releases Intensify, Trading Strategies Adjust Accordingly

As the macro heavyweight data week arrives - ISM data, JOLTS, Fed Beige Book, unemployment claims, ADP, ISM services, and non-farm payroll report - Ostium lists conditional tactical setups. For bulls, they prefer evidence of support exhaustion: trendline resistance being respected, today's low reaching the June opening price / 200-day line cluster through the liquidation upper shadow, and after forming a bullish divergence at that position, bidding back to the weekly opening price and retesting $112,000. For bears, their preference is a sharp squeeze at the beginning of the week to the $112,000 trend exhaustion... If today's low of $107,000 is not broken, it may retrace gains to the weekly low before non-farm payroll.

The US Dollar Index is Bearish in the Long Term, Favorable for Bitcoin

The report extends beyond Bitcoin. The dollar backdrop in the Ostium framework remains a tailwind for Bitcoin until the end of the year. The dollar index is around 97.2, and the agency states that the current sequence resonates with past cyclical declines, expecting the dollar index to break below 96 and push to at least 94.6, but more likely 93, where the bottom formation may appear above the 200-month moving average. The long-term bullish outlook for the dollar index has not been dismissed; instead, Ostium positions the current trend as a final cyclical decline, followed by the formation of higher lows and a multi-year recovery, depending on policy outcomes. A decisive monthly recovery above 100 would invalidate the recent bearish outlook on the dollar index.

Conclusion

The US dollar index forms a subtle seesaw effect with Bitcoin, where geopolitical risks support the dollar but the Fed's rate cut expectations limit the upside. A weaker dollar is beneficial for Bitcoin. Bitcoin at $98,000 becomes the first key structural breakout level in the cycle, and reclaiming $112,000 on the daily chart would strongly indicate the formation of a local bottom. Maintaining $105,000 on a monthly basis and closing above $115,000 will lay the foundation for a new high in October. Traders need to closely monitor ISM data and non-farm reports, as these may determine the short-term direction of risk assets. If the dollar index falls below the 96 level, it could push Bitcoin to test historical highs.