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Dollar Index Declines Below 105 as Bitcoin Hits $90K
The DXY index has now dropped to its lowest level since mid-November.
Updated Mar 5, 2025, 5:32 p.m. Published Mar 5, 2025, 9:40 a.m.
What to know:
- The DXY index, a measure of the U.S. dollar's strength, has dropped below 105 for the first time since mid-November.
- The DXY index continues to mirror President Trump's first election cycle.
- Bitcoin rose above $88,000.
At the start of the year, CoinDesk research indicated that the Dollar index (DXY) a measure of the U.S. dollar’s strength against a basket of major trading partners was mirroring its trajectory from Donald Trump’s first term as president.
Between September 2024 and January 2025, coinciding with Trump’s re-election, the DXY index climbed from 100 to 110. This current cycle, the index peaked at 110 in mid-January but has since dropped below 105 for the first time since mid-November. If the DXY were to fall to around 103, it would erase all its gains since Trump's victory in November.
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Typically, a DXY index above 100 is considered strong, which tends to put pressure on risk assets. However, as the index dipped below 105, bitcoin rose above $88,000.
A similar pattern was observed in 2017 when the DXY fell from 103 to below 90, coinciding with bitcoin’s bull run that year, that saw it top out at $20,000 in December.
Despite this, macroeconomic uncertainty persists, with concerns surrounding tariffs, inflation, and U.S. GDP growth. The economy appears to be slowing, and Friday’s jobs report is expected to show a continuation of 4.0% unemployment rate.
If the report comes in weaker than anticipated, treasury yields could continue declining, increasing the likelihood that the Federal Reserve could consider a rate cut in its March meeting.
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Bitcoin Treads Water Near $90K as Bitfinex Warns of 'Fragile Setup' to Shocks
BTC's relative weakness compared to stocks points to tepid spot demand, making the largest crypto vulnerable to macro volatility, Bitfinex analysts said.
Was Sie wissen sollten:
- Bitcoin erased very modest overnight gains early Monday and spent the rest of the U.S. session in a tight range around the $90,000 level.
- Rising long bond yields and a small U.S. equities pulling back weighed on risk appetite as traders eye this week's Federal Reserve meeting.
- Bitfinex analysts pointed out bitcoin's relative weakness against U.S. stocks amid modest spot demand and structural softness.
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