Bitcoin Eyes Potential Reversal as U.S. Dollar Index Nears Key Support
The U.S. Dollar Index (DXY) is trading just above a major long-term support line last seen during the 2008 crisis, currently near a three-month low with recent tests in July and September 2025. Despite a strong post-2024 election rally, the dollar has experienced a choppy decline throughout 2025.
As the dollar weakens, hard assets like gold, silver, and copper have reached new record highs, alongside rising stock markets. However, Bitcoin and the broader cryptocurrency markets have remained under pressure and have not yet benefited from the dollar’s weakness, with Bitcoin priced at approximately $87,129.63.
Market observers note that if the DXY support line breaks, it could potentially trigger a reversal in the crypto downtrend. Monetary policy divergence is influencing these dynamics, with perceived pressure on the Federal Reserve to cut rates contrasting with tightening moves by other central banks such as the Bank of Japan. This divergence could push the dollar lower if sustained, possibly providing a tailwind for Bitcoin.
