While the U.S. debt reaches a new all-time high, the DXY has just hit a historically weak level, currently trading 6.5 points below its 200-day moving average, marking the largest deviation in the past 21 years.
Although this may appear alarming at first glance, it actually tends to benefit risk assets like Bitcoin.
This is a well-known correlation in traditional finance. As the dollar weakens and loses its safe-haven appeal, investors reassess their portfolio allocations and shift capital toward alternative asset classes.
This chart illustrates that phenomenon by highlighting periods where the DXY trades below its 365-day moving average.
Looking at historical data, it becomes clear that such periods have been highly favorable to BTC.
We are currently in a phase where the weakness of the DXY could fuel a new rise in BTC but the price didn't reacted yet.
This tool serves as a valuable indicator for identifying early bull market phases and periods of euphoria, not because of pure technical triggers, but because it reflects increasing liquidity potentially flowing into crypto markets.
You can also find this chart available as a live alert.
Written by Darkfost
