DXY has broken structure, signaling a possible retracement
BTC may top earlier than SPX in reaction to dollar weakness
Macro top formation could align with asset rotation
DXY Breakdown May Shift Momentum to BTC and SPX
The U.S. Dollar Index (DXY) has just broken its structural support, indicating a potential retracement phase. For macro traders, this shift carries serious implications—not just for forex markets, but also for risk-on assets like Bitcoin (BTC) and the S&P 500 (SPX).
When DXY weakens, capital often flows into risk assets. The timing of this rotation matters. Analysts suggest that Bitcoin may react faster, forming a macro top earlier, while SPX could peak later, following traditional market lag.
How DXY Impacts Risk Assets
DXY measures the strength of the U.S. dollar against a basket of major currencies. When it retraces, it usually reflects reduced demand for the dollar and increased investor appetite for risk.
This typically translates to bullish sentiment in crypto and equities, as a weaker dollar boosts liquidity and investor confidence. With DXY breaking its prior structure, many are watching for a reversal in capital flow, potentially fueling Bitcoin and SPX rallies—before a macro top sets in.
$DXY retracement is possible just after breaking structure, it will rotate its previous move to $BTC and $SPX.
This is where i consider the macro top will happen.
More earlier for BTC and later for SPX. pic.twitter.com/GJWaWUK02F
— Javier Santini (@javierosantini) July 7, 2025
Timing the Macro Top: BTC First, Then SPX
While both BTC and SPX may benefit from a DXY pullback, their top formations are likely to happen at different times. Bitcoin, being more volatile and sentiment-driven, could top out earlier as liquidity rushes in quickly.
The SPX, more tethered to broader economic data and institutional trends, might form its peak more gradually. Traders should monitor key technical levels on both charts in the coming weeks to anticipate reversals.
This DXY movement may mark the start of a key macro rotation phase, offering both risk and opportunity for market participants.
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