Bitcoin is signaling potential upside as the US Dollar Index (DXY) falls below critical long-term moving averages, reinforcing its historical inverse correlation with the cryptocurrency. The DXY recently plunged to 96.377, its weakest level in over three years, registering a year-to-date decline exceeding 10%.
Market analysts highlight that Bitcoin typically gains when the DXY trades beneath its 365-day moving average, a pattern substantiated by performance data. This technical breakdown creates a historically favorable environment for risk assets, with Bitcoin emerging as a primary beneficiary of dollar depreciation.
The dollar’s sustained weakness stems from mounting macroeconomic pressures, including escalating US national debt and shifts in global trade policies. These fundamental factors contribute to diminishing confidence in the greenback, accelerating capital rotation toward alternative assets.
With the DXY’s persistent downturn below key trend indicators, Bitcoin’s inverse correlation suggests significant room for appreciation. Market observers indicate this technical setup could propel the cryptocurrency’s next significant upward phase.