$DXY → The USD Empire

As we all know, the $USD has been tanking quite a lot over the past six months, and many are saying it will go even lower. But let us take a deeper look.

Based on price action, the USD has finally come back down to its support area, which is the lower trendline of the parallel channel. Do not be fooled. It is more than just a trendline, it has marked the start of historical USD rallies.

While people are accepting the idea of a continued USD decline, the reality is that the USD still stands as the ultimate hedge for investors. This was evident during the 2011 eurozone debt crisis, the 2014 Fed rate hike, the 2021 post-COVID stimulus, and maybe even now with what I believe could be the next catalyst: a disinflation-triggered rate cut, as the economy cools too fast and the Fed cuts rates to stabilize it.

So, while I am pro-Bitcoin and crypto, this chart is more than enough proof to remind me that, for now, the USD still remains the backbone of global liquidity.