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Dollar Index (DXY) Break Below 98.50 Could Trigger Crypto Bull Run

Published by
Mustafa Mulla

The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against major currencies, has reached a crucial level, currently trading near the 98.95 level. According to popular crypto analyst Captain Faibik, the U.S. Dollar Index (DXY). Faibik calls this a “make-or-break” moment for risky assets, mainly for Bitcoin & Gold.

Let’s find out why!

Crucial Support Zone For DXY

In a recent tweet, Faibik shared a monthly chart of the DXY, showing the dollar stuck at the lower edge of an ascending channel that’s been in place since 2009. This critical support zone, ranging between 98.50 and 99.00, has historically been tested multiple times before, often triggering a bounce. 

For Bitcoin investors, this is a major signal since the dollar’s strength or weakness often dictates Bitcoin’s price action.

Meanwhile, Faibik calls this a “make-or-break” moment, if the dollar holds, Bitcoin could face continued headwinds; if it breaks, Bitcoin may see a strong bullish run.

Possible Scenarios Ahead

Looking at the possible scenarios, Faibik says that if the dollar holds this support and rebounds, it expects a move back to the 104–106 range in the coming months. That would mean renewed dollar strength, which typically adds pressure to assets like Bitcoin and gold. 

But, if the dollar closes below the channel, Faibik warns this could shatter the dollar’s long-term bullish momentum. A falling dollar to the 92–94 range would likely add fresh buying interest in Bitcoin.

Fed’s Softening Monetary Policy

On top of that, speaking at an event for the Fed’s International Finance (IF) Division, Fed Chair Jerome Powell said the Fed might slow down its strict money policies later this year.

This is good news for Bitcoin and other cryptocurrencies because less strict money rules often mean more money flows into riskier assets like crypto.

As of now bitcoin price is trading around $105,367, reflecting a slight jump in the last 24 hours, with a market cap hitting $2.09 trillion.

FAQs

Why is the DXY level important for Bitcoin right now?

DXY at 98.95 is a key support zone; a bounce may hurt Bitcoin, while a breakdown could trigger a bullish crypto rally.

How does the US Dollar Index affect Bitcoin?

A strong DXY often pressures Bitcoin, while a weak dollar usually boosts crypto demand and price action.

How does Fed policy impact Bitcoin price

Easing monetary policy by the Fed can push more money into crypto, lifting Bitcoin and altcoin prices.

Mustafa Mulla

Mustafa has been writing about Blockchain and crypto since many years. He has previous trading experience and has been working in the Fintech industry since 2017.

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