Bitcoin (BTC) Gains Weaken as Dollar Rises in Fed Week

The rally in the dollar index reflected traders' hopes for a Fed adjustment in this week's interest rate decision, but bids for bitcoin remained below expectations.

Bitcoin had an impressive performance last week as the flagship cryptocurrency soared to $21,000 last Wednesday -- its highest level since late August.

On the other hand, the dollar retreated from its lows, while tech stocks and bonds rose.

Bitcoin's Pre-Fed Pullback

Bitcoin has a tendency to rise when the dollar is falling.

However, bitcoin's upward momentum is slowing on Monday. Data from CoinMarketCap and TradingView suggest that the world's largest cryptocurrency asset can trace its price back to around $20,500.

The slight decline may be related to the recent Tether news.

Bloomberg reported on Oct. 31 that federal prosecutors are opening an investigation into the largest stablecoin project. U.S. regulators are trying to investigate whether senior officials at Tether committed crimes.

Mixed News

Negative news was recently announced as Fud by Paolo Ardoino, Tether's chief technology officer, with zero or no impact on the overall market. The cryptocurrency market ended the month with a total market cap of $1,000 billion.

Bitcoin, ethereum and most cryptocurrencies have been elucidated. Trading volumes and liquidity have increased as investors return cryptocurrencies. However, the Fed's meeting this Wednesday may not be conducive to the current bullish direction.

U.S. core inflation continues to put significant pressure on the Fed to raise rates. Tensions are rising especially after the U.S. PCE price index showed a 6.2% increase over the previous year.