BTC Trades Below $118,000 as Dollar Index Reaches Five-Week High

Bitcoin (BTC) is trading below $118,000 as the dollar index (DXY) reaches a five-week high of 99.34 due to strong U.S. economic data.

The U.S. GDP grew at an annualized rate of 3% in Q2, driven by a significant drop in imports and a 1.4% rise in consumer spending.
The gross domestic purchases price index rose 1.9%, down from 3.4% in Q1.
This positive GDP report may influence the Federal Reserve to maintain steady interest rates.
The DXY has stabilized after a decline from highs above 110.00 earlier this year, raising concerns about potential short squeezes in USD positions affecting crypto markets.

Market analysts suggest that crowded positions in USD shorts pose risks, potentially leading to increased volatility across equities, emerging markets, and cryptocurrencies.