Dollar Index Drops Below 105 as Bitcoin Surges Toward New Highs
The U.S. Dollar Index (DXY) has slipped below 105, marking its lowest level since mid-November.
At the start of the year, CoinDesk research suggested that the DXY was following a pattern similar to its movement during Donald Trump’s first term. Between September 2024 and January 2025, the index climbed from 100 to 110, coinciding with Trump’s re-election. However, after peaking in mid-January, it has been on a steady decline. Now, with the index dipping below 105, a further drop to 103 would erase all gains made since Trump’s victory in November.
Typically, a stronger dollar—represented by a DXY above 100—puts pressure on risk assets. However, as the index weakened, Bitcoin (BTC) surged past $88,000, reinforcing bullish sentiment in the crypto market.
A similar trend played out in 2017, when the DXY fell from 103 to below 90, aligning with Bitcoin’s historic bull run to $20,000 by the end of the year.
Despite these market movements, uncertainty persists, with concerns about inflation, tariffs, and slowing U.S. GDP growth. Investors are also watching Friday’s jobs report, which is expected to confirm an unemployment rate of 4.0%.
Should the report come in weaker than anticipated, treasury yields may decline further, increasing speculation that the Federal Reserve could consider a rate cut at its March meeting.
