Bitget App
Trade smarter
Buy cryptoMarketsTradeFuturesEarnWeb3SquareMore
Trade
Spot
Buy and sell crypto with ease
Margin
Amplify your capital and maximize fund efficiency
Onchain
Going Onchain, without going Onchain!
Convert
Zero fees, no slippage
Explore
Launchhub
Gain the edge early and start winning
Copy
Copy elite trader with one click
Bots
Simple, fast, and reliable AI trading bot
Trade
USDT-M Futures
Futures settled in USDT
USDC-M Futures
Futures settled in USDC
Coin-M Futures
Futures settled in cryptocurrencies
Explore
Futures guide
A beginner-to-advanced journey in futures trading
Futures promotions
Generous rewards await
Overview
A variety of products to grow your assets
Simple Earn
Deposit and withdraw anytime to earn flexible returns with zero risk
On-chain Earn
Earn profits daily without risking principal
Structured Earn
Robust financial innovation to navigate market swings
VIP and Wealth Management
Premium services for smart wealth management
Loans
Flexible borrowing with high fund security
Declining Dollar Index Could be a Tailwind For Crypto: Analysts

Declining Dollar Index Could be a Tailwind For Crypto: Analysts

CryptopotatoCryptopotato2025/03/05 16:00
By:Author: Martin Young

A falling greenback could be the catalyst to drive high-risk assets such as crypto to new highs, claim analysts.

The US Dollar Index (DXY) has fallen to a fourth-month low this week as concerns about sluggish expansion in the world’s largest economy amid escalating trade tensions.

DXY tanked to 104.13 on March 6, its lowest level since early November, according to Tradingview. The US Dollar Index is an index of the value of the greenback relative to a basket of foreign currencies.

A declining DXY is often associated with a shift toward riskier assets like stocks and crypto as investors move away from the safety of the USD.

The index has just broken down from a head and shoulders topping pattern, reported Bravos Research, before adding:

“This could be a major tailwind for risk-on assets.”

Crypto to Benefit?

When the dollar weakens, investors look for alternative stores of value, including Bitcoin, crypto assets, and gold, which often rallies when the greenback falters.

Since most crypto assets are priced in USD, a weaker dollar also means it takes more dollars to buy the same amount of BTC or ETH, which can push prices higher. Macro investor Raoul Pal echoed the sentiment, stating that the second quarter of the year should be good for crypto.

“With the dollar, rates and oil headed lower, financial conditions are now easing fast and lead risk assets by a couple of months. Should signal a good Q2 for tech and crypto and hopefully H2 2025, too as these trends continue.”

Ricardo Evangelista, senior analyst at ActivTrades, said , “Traders have shifted from pricing in growth and inflationary pressures from Trump’s tariffs to anticipating a slowdown in the US economy as the country moves towards protectionism.”

“Overall, the dollar is on the turn,” commented Societe Generale FX strategist Kit Juckes in a note on March 5. “From multi-decade highs, the dollar has limited upside, even if a catalyst for a fall has been absent until now,” he added.

Crypto Market Outlook

Crypto markets have already started to show signs of recovery today, with total capitalization gaining 2.3% to top $3.1 trillion.

Bitcoin recovered from its dip earlier this week, topping $92,500 during morning trading in Asia on Thursday. Meanwhile, Ethereum is slowly grinding higher from its 16-month low , adding 6% on the day to reach $2,300. Altcoins are predominantly in the green, with bigger gains for Pi Network (PI), Chainlink (LINK), and Bitcoin Cash (BCH).

0

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

PoolX: Earn new token airdrops
Lock your assets and earn 10%+ APR
Lock now!