• The DXY Dollar Currency Index has climbed to the highest levels since Bitcoin’s inception, potentially impacting the crypto market.
• A falling USD is providing a much needed relief rally across the asset class in the last few months.
• If the MACD crosses bearish and confirms at the end of the month, it could cause bearish momentum to strengthen and create a dramatical decline in the dollar index.
The Almighty Dollar
The almighty dollar, represented by the DXY Dollar Currency Index, is at an important inflection point with its potential to impact the blossoming bull market in Bitcoin and other cryptocurrencies. Since its inception, Bitcoin has been struggling with USD dominance.
Devastating Impact of US Dominance
In 2022, cryptocurrencies and other risky assets were significantly impacted due to an overwhelming dominance of USD on a global scale. This caused a surge in DXY which made it difficult for cryptos to compete against.
Relief Rally For Crypto Assets
Fortunately, due to a weakening US dollar over recent months, crypto assets have gained some reprieve from this pressure through what is known as a relief rally. The MACD analysis suggests that if there is no confirmation of this bearish crossover by month’s end, then further collapse across crypto could occur as momentum remains strong for USD strength.
Crypto Market At Risk Of Collapse
An ultimate collapse of cryptocurrencies could be imminent should bearish momentum continue within USD strength as this would weaken their trading pairs worldwide due to their reliance on US currency being used as a reserve currency globally. This would also lead to BTC prices reaching extreme lows and other altcoins following suit despite any local resistance they may experience along their respective paths downward.
Conclusion
The future of cryptocurrency rests heavily on how well or poorly US currency performs over time. With both bullish and bearish scenarios possible depending on how DXY fares come month’s end, many investors are keeping close watch on what happens next before deciding whether or not they should stay invested or sell out while they still can.