Bitcoin Gets 'Highly Favorable' Cues as DXY sets 21-year Weakness Record
Jul 09, 2025
Bitcoin maintaining its inverse correlation to the US dollar means big wins on the horizon as the dollar strength DXY index trails below key moving averages.
Bitcoin stands to benefit from US debt and dollar weakness as the greenback sets a two-decade record.
New research from on-chain analytics platform CryptoQuant on Tuesday reaffirms Bitcoin’s inverse correlation with the US Dollar Index (DXY).
BTC price tailwinds stack up as DXY sags
BTC price strength continues to receive a tailwind from the US dollar, which this month bounced off its lowest levels versus trading-partner currencies since early 2022.
DXY fell to 96.377 on July 1, data from Cointelegraph Markets Pro and TradingView shows — a level not seen in over three years, with the dollar strength yardstick down over 10% year-to-date.
The dubious achievements, however, do not end there; CryptoQuant reveals that, versus its 200-day moving average (MA), DXY is circling a zone which it last visited more than 20 years ago.
“While the US debt reaches a new all-time high, the DXY has just hit a historically weak level, currently trading 6.5 points below its 200-day moving average, marking the largest deviation in the past 21 years,” contributor Darkfost summarized in a QuickTake blog post.
Bitcoin has regularly demonstrated inverse correlation to DXY over its lifespan, but in recent years, the relationship has become less clear-cut.
Darkfost argued that the trend remains part of a broader risk-asset investment pattern.
“As the dollar weakens and loses its safe-haven appeal, investors reassess their portfolio allocations and shift capital toward alternative asset classes,” he said.
An accompanying chart showed the relationship between BTC price performance and the relationship of DXY to its 365-day MA.
“This chart illustrates that phenomenon by highlighting periods where the DXY trades below its 365-day moving average,” Darkfost said.
Dollar makes the case to own Bitcoin
As Cointelegraph reported, US dollar weakness has accelerated thanks to the implementation of US trade tariffs.
For Bitcoin proponents, it is fiat currency in general that is ceding prowess to crypto.
“If the dollar’s very strong, it makes the case to own it,” economist Lyn Alden told Cointelegraph last week on Bitcoin’s “main competition.”
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