The U.S. Dollar Index plunges to 97.546, signaling a macro shift that strengthens the bullish case for Bitcoin and risk assets.
Bitcoin trades between $107K and $110K as analysts expect a breakout once liquidity returns and macro conditions further ease.
Despite fading weekend momentum, BTC’s long-term bullish setup stays intact, with resistance at $109.5K and rate cuts fueling optimism.
The U.S. Dollar Index (DXY) has dropped sharply, raising bullish hopes for Bitcoin and risk assets. Currently sitting at 97.546, the index reflects a major correction from its 2022 high of 114.00. That level was the strongest dollar since 2002. The recent decline has prompted traders to reevaluate macro trends. Bitcoin, meanwhile, is in a tight range between $107,000 and $110,000. Despite this consolidation, some analysts foresee a breakout once liquidity increases.
Dollar Weakness Signals Market Shift
Since peaking in September 2022, the DXY has been on a downward trajectory. The move down accelerated in early 2025. In fact, this has been the worst start to a year for the dollar since 1973. The index dropped from 107.00 to its current level near 97.00. Key support lies around this area, while resistance looms near the 107.00 to 110.00 zone.
Source: Javier Santini
Moreover, technical patterns show the dollar completed its third macro cycle since 2014. Each cycle featured clear accumulation, markup, distribution, and markdown phases. Currently, the index appears to be entering a fresh markdown phase. This could start of a risk-on environment for assets like Bitcoin and the S&P 500.
Bitcoin Stalls But Remains Bullish
Bitcoin has been sluggish despite positive macro tailwinds. Over the weekend, BTC briefly surged above $109,000. That move followed favorable U.S. trade talks and a supportive tweet from Elon Musk. However, momentum faded quickly, and prices pulled back.
Still, analysts like Puckrin believe a breakout is only a matter of time. They argue that once liquidity floods back, prices above $107,000 will feel conservative. Additionally, interest rate cuts appear back on the table, fueling even more optimism.
Hence, the market may soon enter a new growth phase. But for now, BTC must overcome stiff resistance at $109,500. Spot demand also needs to improve to sustain any upward move.
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