Dollar Weakness Signals Major Bitcoin Move Ahead, Data Suggests 

A new report from CryptoQuant highlights a historically strong inverse correlation between the U.S. dollar and Bitcoin—one that may be signaling the next leg of the crypto bull market.

According to the report, the U.S. Dollar Index (DXY) has fallen 6.5 points below its 200-day moving average, marking the largest deviation in over two decades. While that might raise alarm in macroeconomic circles, for Bitcoin it could be a bullish gift in disguise.

CryptoQuant analysts point to a well-established trend in traditional finance: when the dollar weakens, risk assets tend to thrive. As investors reassess the safety and yield of dollar-based assets, capital often rotates into alternative markets—chief among them, cryptocurrencies.

The DXY’s sustained weakness suggests a shift in investor sentiment, particularly as the U.S. debt hits record highs. As the greenback loses its safe-haven appeal, Bitcoin becomes increasingly attractive as a hedge against fiat debasement and macro instability.

Historically, Bitcoin has performed well during extended DXY downturns. The report includes a chart illustrating that whenever the DXY trades below its 365-day moving average, Bitcoin has entered either an early bull phase or a period of sustained euphoria.

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Despite the technical setup, Bitcoin’s price has yet to fully reflect this macro tailwind. At the time of writing, BTC remains in consolidation territory near $109,000, even as liquidity indicators suggest increasing capital inflow potential.

This disconnect, CryptoQuant suggests, may not last. If historical patterns hold, the weakening dollar could soon catalyze a major move in Bitcoin. For market participants tracking long-term trends, the DXY’s current slump is not just a data point—it may be an early signal that liquidity is returning to crypto, priming Bitcoin for a renewed surge.

Kosta Gushterov

Kosta has been working in the crypto industry for over 4 years. He strives to present different perspectives on a given topic and enjoys the sector for its transparency and dynamism. In his work, he focuses on balanced coverage of events and developments in the crypto space, providing information to his readers from a neutral perspective.