Bitunix Analyst: The dollar's pricing power oscillates between policy credibility and war outcomes, as the market enters a phase of exchange rate-driven risk reallocation.

**April 21 News Brief** Markets are now pricing in the "Who Determines the End Condition" scenario. Former President Trump explicitly narrowed the ceasefire window while retaining the Strait of Hormuz blockade as a negotiation chip, transforming energy supply risks into a bargaining tool. However, internal divisions in Iran’s negotiating stance have hindered short-term consensus-building, shifting geopolitical risk from a one-time event trigger to a variable tied to expectations of sustained impact. Against this backdrop, the U.S. dollar’s core driving logic has reversed: it’s no longer tied solely to interest rate differentials and safe-haven flows, but now focuses on the comprehensive pricing of policy credibility and liquidity pathways. - On one hand, Federal Reserve Chair Powell laid out a clear hawkish framework ahead of his congressional hearing—emphasizing the Fed’s independence and commitment to taming inflation—effectively ruling out aggressive rate cuts in the near term. This provides structural support for the dollar. - On the other hand, political pressure to cut rates persists, and markets are still pricing in the potential path of balance sheet contraction as a hedge against rate cuts. As a result, the dollar has failed to establish a one-sided trend and instead entered range-bound volatility. Structurally, the U.S. Dollar Index (DXY) has pulled back from a recent rebound high of ~100.5 and is now oscillating near 98, entering short-term consolidation. Clear support remains in the 97.4–97.0 range below, indicating the market hasn’t fully shifted to risk-on sentiment but is reassessing whether the dollar still holds a safe-haven and interest rate advantage. Put simply, the dollar isn’t turning bearish yet—it’s in a "pricing divergence period": constrained on the upside by policy dominance and rate cut expectations, and supported on the downside by war risks and inflationary pressures. This dollar structure directly impacts crypto markets. Bitcoin (BTC) is testing the $76,000 level repeatedly, with $72,500 acting as a key support zone—still undergoing liquidity redistribution within a range. The dollar’s non-trending but high-volatility environment will amplify BTC’s false breakouts and liquidity harvesting behavior, rather than driving a one-sided trend. The key lies in two potential dollar paths: 1. **Conflict escalation**: If tensions worsen and energy inflation persists (forcing the Fed to keep rates high), the dollar will strengthen again—making BTC’s 77K–78K upper range a likely trap for long positions. 2. **Negotiation progress**: If talks advance and the Strait of Hormuz reopens, inflation expectations will ease. Markets will reprice rate cuts, the dollar will weaken, and BTC could break key liquidity levels to extend its rally. In summary, the market’s focus has shifted from the risk event itself to how the dollar prices these events. Until the dollar establishes a clear trend, crypto markets will remain range-bound—driven by liquidity dynamics rather than sustained directional moves.