Recent analysis confirms that weakness of the US dollar may lead to a rise in Bitcoin. The US Dollar Index (DXY) is at its lowest level in over three years.
US Dollar Index (DXY) Decline
The US Dollar Index (DXY) fell to 96.377 on July 1, marking the lowest level since early 2022. Currently, the dollar shows more than a 10% drop year-to-date.
Bitcoin's Correlation with DXY
Bitcoin exhibits an inverse correlation with DXY, making periods of dollar weakness favorable for the cryptocurrency. "While this may seem alarming, it tends to benefit risk assets like Bitcoin," noted analyst Darkfost.
Bitcoin's Market Prospects
The weakness of the dollar may lead to a new rise in Bitcoin, although its price has yet to react to current market changes. "Historical data shows that such periods have been very favorable for BTC," added Darkfost.
The state of the US dollar may play a significant role in shaping Bitcoin prices. As the DXY continues to decline, investors and experts remain cautious, awaiting the manifestation of this correlation.
