The US Dollar Index sharply fell to 102.45, which may bring liquidity benefits to the crypto market.

According to BlockBeats, on April 10, the US Dollar Index (DXY) expanded its short-term decline to 26 points, dropping over 0.50% during the day and currently reported at 102.45, reaching a new low in nearly two weeks. The market generally believes that this decline is related to the rising expectations of interest rate cuts by the Federal Reserve this year and weak US economic data. As the 'anchor' for global asset pricing, a weaker dollar may inject liquidity into the risk asset market, with cryptocurrencies as high-volatility targets potentially becoming a choice for short-term capital hedging.

The weak dollar has led to a positive response in the crypto market.

A decline in the US Dollar Index typically indicates a rising preference for non-US currencies and risk assets. Historical data shows a certain negative correlation between the dollar and the prices of crypto assets like Bitcoin. As the DXY falls, Bitcoin is fluctuating around $67,000, with a significant increase in 24-hour trading volume; Ethereum is also rebounding to $3,350, with a daily increase of 3%. Market analysts point out that if the dollar continues to weaken, the crypto market may further attract traditional capital.

Rate cut expectations boost market sentiment.

Recent US March CPI data, retail sales data, and manufacturing PMI have all fallen short of expectations, reinforcing the market's bets on the Federal Reserve cutting rates this year. The CME FedWatch tool indicates that traders' expectations for a rate cut in June have risen to over 60%. Under expectations of liquidity easing, demand for cryptocurrencies as 'inflation hedges' and 'high-risk high-return' assets may increase. A report from Binance Research has pointed out that the turning point of dollar liquidity is often an important signal for the mid-term trend in the crypto market.

Technical and funding aspects resonate.

From a technical perspective, if Bitcoin stabilizes above the key resistance level of $68,000, it is expected to challenge historical highs again; if Ethereum can break through $3,400, it may open up upward space. On-chain data shows that the net inflow of stablecoins into centralized exchanges has increased by 15% in the past 24 hours, reflecting an increased willingness of investors to enter the market.

Short-term outlook.

Despite a favorable macro environment, the crypto market still faces regulatory uncertainty and geopolitical risks. Investors need to pay attention to the PPI data and speeches from Federal Reserve officials to be announced this week. If the US Dollar Index continues to weaken, Bitcoin may lead mainstream cryptocurrencies into a new round of rebound.