Yuan Soars, Bitcoin Stalls: Why the Dollar Dip Isn’t Lifting Crypto
Despite a strengthening Chinese yuan and a weakening dollar, Bitcoin remains stalled due to thin year-end liquidity and negative institutional ETF flows.Summary
China's onshore yuan has reached a 2.5-year high against a weakening dollar, driven by Chinese exporters converting dollar revenues before year-end and signs of Chinese economic recovery alongside US Federal Reserve rate cuts. This scenario—a weakening dollar—typically boosts Bitcoin, as seen with gold hitting record highs. However, Bitcoin is stuck in the $85,000-$90,000 range, failing to sustain upward momentum.
Several factors explain this disconnect. First, year-end liquidity is thin, amplifying volatility but limiting conviction-driven moves. Second, US spot Bitcoin ETFs have experienced significant net outflows recently. Third, uncertainty surrounding the Bank of Japan's recent rate hike continues to dampen overall risk appetite.
Analysts suggest the bullish correlation might only be delayed, not broken. If the dollar weakens further in 2026 due to potentially aggressive US monetary easing, Bitcoin may finally react positively once market liquidity normalizes in January and Fed policy becomes clearer.
(Source：BeInCrypto)