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The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against major currencies, has reached a crucial level, currently trading near the 98.95 level. According to popular crypto analyst Captain Faibik, the U.S. Dollar Index (DXY). Faibik calls this a “make-or-break” moment for risky assets, mainly for Bitcoin & Gold.
Let’s find out why!
Crucial Support Zone For DXY
In a recent tweet, Faibik shared a monthly chart of the DXY, showing the dollar stuck at the lower edge of an ascending channel that’s been in place since 2009. This critical support zone, ranging between 98.50 and 99.00, has historically been tested multiple times before, often triggering a bounce.
For Bitcoin investors, this is a major signal since the dollar’s strength or weakness often dictates Bitcoin’s price action.
Meanwhile, Faibik calls this a “make-or-break” moment, if the dollar holds, Bitcoin could face continued headwinds; if it breaks, Bitcoin may see a strong bullish run.
Possible Scenarios Ahead
Looking at the possible scenarios, Faibik says that if the dollar holds this support and rebounds, it expects a move back to the 104–106 range in the coming months. That would mean renewed dollar strength, which typically adds pressure to assets like Bitcoin and gold.
But, if the dollar closes below the channel, Faibik warns this could shatter the dollar’s long-term bullish momentum. A falling dollar to the 92–94 range would likely add fresh buying interest in Bitcoin.
Fed’s Softening Monetary Policy
On top of that, speaking at an event for the Fed’s International Finance (IF) Division, Fed Chair Jerome Powell said the Fed might slow down its strict money policies later this year.
This is good news for Bitcoin and other cryptocurrencies because less strict money rules often mean more money flows into riskier assets like crypto.
As of now bitcoin price is trading around $105,367, reflecting a slight jump in the last 24 hours, with a market cap hitting $2.09 trillion.
