The First After 3 Years in Dollar May Trigger a New Rally in Bitcoin and Altcoins!
The US Dollar Index (DXY) falling below 98 for the first time in three years has created an environment where risky assets like cryptocurrencies may gain value.
The US Dollar Index (DXY) is an important indicator measuring the strength of the dollar against major global currencies. The index has dropped below 98 for the first time since the beginning of 2022, revealing a notable change in the markets. This decline could create a positive groundwork for a new wave of increases, especially in cryptocurrencies like Bitcoin (BTC).
The weakening of the dollar is generally causing an increase in risk appetite in the markets. According to the recently announced data, annual inflation in the US occurred at 2.4%, slightly below expectations of 2.5%. This situation has almost made the market's expectation of an interest rate cut by the US Federal Reserve (Fed) in June nearly certain. According to the CME FedWatch tool, the markets give a 99.8% probability that interest rates will be reduced to the range of 4.25-4.50% in the June meeting.
A New Space for Cryptocurrencies
In recent years, the DXY staying above 100 has meant a strengthening dollar; generally having a negative impact on speculative assets like stocks and cryptocurrencies. However, in the current environment, the weakening dollar creates a supportive outlook for risky assets by increasing global liquidity.
Moreover, it is noted that uncertainties in the trade policies of the Trump administration and global “de-dollarization” rhetoric have been effective in the dollar's depreciation. If these conditions continue, a new and strong upward period may begin in the cryptocurrency markets.
