Bitcoin falls below $118,000, Dollar Index hits a 5-week high──US GDP grows by 3% in the second quarter | CoinDesk JAPAN

• Bitcoin is trading below $118,000. This movement follows the economic growth data from the United States, which pushed the Dollar Index to a five-week high.
• The Dollar Index rose to 99.34, reaching its highest level since June 23.
• Market observers are expressing concerns about the potential risks posed by the excessive accumulation of short positions in the Dollar. This could impact the stock market and the cryptocurrency market.

According to the data source TradingView, the Dollar Index, which indicates the value of the US Dollar against major currencies, rose to 99.34, marking its highest level since June 23.

Following the release of better-than-expected Gross Domestic Product (GDP) data in the United States, buy orders for the Dollar surged. This data indicated that the economy expanded at an annual rate of 3% in the second quarter.

The sharp decrease in imports boosted GDP. Meanwhile, consumer spending increased by 1.4% following a 0.5% rise in the first quarter, indicating a recovery in domestic demand. In contrast, the domestic total purchase price index fell from a 3.4% increase in the first quarter to a 1.9% increase.

It is believed that this strong GDP data has strengthened the view that the Federal Reserve Board (FRB) will keep interest rates unchanged at the meeting on the 30th.

The dollar index has remained stable over the past few weeks, putting an end to the sharp decline trend from the January high of over 110.00 dollars. Some observers are concerned that this stability could lead to a liquidation of short positions on the US dollar, potentially strengthening the upward momentum of the US dollar, which is the world's reserve currency, while increasing the downward pressure on the cryptocurrency market.

The market insight team at QCP Capital, based in Singapore, pointed out that "there are short-term risks arising from the excessive short positions in the US Dollar. The consensus scenario for the majority of 2025 has been predicated on a weaker dollar due to the ongoing trade war, but the US Dollar has already fallen by 10% year-to-date, and it is uncertain how much further it will decline."

The team pointed out that "According to data from the Commodity Futures Trading Commission (CFTC), traders are taking extreme short positions on the Dollar/Yen. This position is not just a consensus, but the funding costs will also increase over time. In our view, the market is becoming increasingly vulnerable to a Dollar short squeeze, which could force a risk-off reversal across equities, emerging markets, and cryptocurrencies."

|Translation/Editing: Rina Hayashi | Image: 3D Rendering ｜Original: BTC Tentative, Dollar Index Hits 5-Week High as U.S. GDP Grew 3% in Second Quarter

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