The Dollar Strength Index recently achieved its highest level in the last 10 months on the 22nd of September, which indicates a growing confidence in the USD when compared to several other fiat currencies like the Euro, the British pound, the Japanese Yen, as well as the Swiss Franc.
Also, the investors have been quite concerned that this rapid increase in the demand for the USD could pose quite a trouble for Bitcoin, and other cryptocurrencies, although these concerns might not be connected to each other. The DXY has also gone on to confirm a golden cross pattern when the 50-day Moving Average has surpassed the longer moving average of 200 days, which is a signal that has often been seen as a precursor to the bull market.
Bitcoin’s Market Performance Could Be Affected By Shifts In the USD
Despite quite a few investors believing that the historical trends are solely determined by the patterns in the price, it is very important to note that in September, the USD did exhibit quite some strength, even in the face of inflationary concerns as well as economic growth in the largest economy in the world. The market expectations for the US gross domestic product growth in 2024 have been hovering at 1.3% which is lower than the 2.4% average rate over the last four years which could be affecting Bitcoin.
If the S&P 500 continues its downtrend, the investors could be risking exit risk markets- irrespective of the growth potential or scarcity. In such an environment, Bitcoin would be facing negative performances. Therefore, the DXY golden cross might not be a net negative for BTC- especially in the longer timeframes.
