Bitcoin bulls eye possible tailwind as U.S. dollar index continues to leg lower

Core Viewpoint - The U.S. dollar index (DXY) is experiencing a decline, trading near its 2025 low, following a significant drop in the first half of 2025 after a strong gain post the November 2024 election of Donald Trump [1][2]. Group 1: Dollar Performance - The dollar's substantial drop in 2025 was initially accompanied by a broader market reaction, with stocks, gold, and bitcoin rising sharply to new records [2]. - Despite the dollar's weakness, gold, silver, and copper have reached new record highs, while bitcoin and the broader crypto markets have faced significant declines [2]. Group 2: Technical Analysis - The DXY index is currently trading just above a critical long-term support level established since the 2008 global financial crisis, which has been tested multiple times [3]. - The potential for the dollar to fall below this major support level is heightened as foreign central banks, including the Bank of Japan, move towards tighter monetary policies, contrasting with pressure on the U.S. Federal Reserve to lower interest rates [4]. Group 3: Implications for Crypto - A break below the long-term support level of the dollar could potentially trigger a reversal in the downtrend of the cryptocurrency market, which has not yet benefited from the weak dollar this year [5].