Dollar Index Slide Boosts Bitcoin’s Long-Term Outlook, Though Short-Term Indicators Warn of Possible Drop Below $100K
The dollar index (DXY) has fallen sharply through the first half of 2025, lending support to bitcoin’s longer-term bullish prospects. However, near-term technical signals suggest BTC might dip below the $100,000 mark.
The DXY, which tracks the U.S. dollar against a basket of key global currencies, has dropped over 10% since January — its most significant six-month decline since the third quarter of 1991, according to TradingView data. The slump has been fueled by President Donald Trump’s trade conflicts and his repeated calls for the Federal Reserve to cut interest rates.
This sharp downturn has pushed the DXY below a critical ascending trendline that’s held for 14 years, while the MACD histogram on the half-year chart has shifted into negative territory. The breach of this long-term support, combined with the negative MACD reading, indicates rising bearish momentum and further downside risk for the dollar.
“Looks like USD could drop another 10% easily… and maybe a lot more in the next 12-24 months,” commented Dan Tapiero, founder and CEO of DTAP Capital, on X (formerly Twitter), highlighting the dollar’s weakness as a positive catalyst for bitcoin.
BTC Faces Potential Short-Term Pullback
Although a weaker dollar favors bitcoin over the long haul, BTC’s short-term technical picture is less reassuring. On Monday, bitcoin slipped 1%, moving away from the upper limit of a bull flag consolidation pattern that’s been forming over the past six weeks.
Traders often turn to tools like the stochastic oscillator to assess whether a rejection at the upper boundary of a consolidation range could signal a move back toward lower levels.
For bitcoin, the 14-day stochastic indicator is showing a similar setup to early June. It’s nearing a drop below the 80 mark, which would signal a move out of overbought territory, suggesting increased selling pressure and a potential pullback within bitcoin’s current trading band.
This means BTC could dip below $100,000 in the near term. However, a strong breakout above the consolidation pattern’s upper boundary would invalidate the bearish outlook and could pave the way for a surge toward $140,000.
