Dollar Index Drops Below 105 While Bitcoin Rises Above $88,000
CoinDesk research indicates that the Dollar index (DXY), which measures the U.S. dollar's strength, is following a similar pattern to Donald Trump’s first presidential term.
- From September 2024 to January 2025, the DXY rose from 100 to 110, peaking in mid-January.
- The index has now dropped below 105 for the first time since mid-November.
- If it falls to around 103, all gains since Trump's November victory would be erased.
- A DXY above 100 typically pressures risk assets; however, Bitcoin (BTC) rose above $88,000 as the DXY dipped.
- A similar DXY decline occurred in 2017, correlating with Bitcoin's rise to $20,000.
Macroeconomic concerns include:
- Tariffs
- Inflation
- U.S. GDP growth
The economy appears to be slowing, with an expected continuation of the 4.0% unemployment rate in the upcoming jobs report. A weaker report could lead to further declines in treasury yields and increase the likelihood of a Federal Reserve rate cut in March.