Insights
DXY (US Dollar Index)
Shows how strong the US dollar is against major currencies such as the euro and yen.
Here's the trend so far. The yellow dashed line is the Bitcoin price.
How to read this chart
Across 12.6 years of history, dollar-strength stretches tended to be a relative headwind and dollar-weakness stretches a tailwind. The most favorable periods came after sharp dollar drops, the least favorable after sharp rallies.
New to this metric?
What is DXY? A thermometer for the dollar's strength. When the dollar strengthens, money has tended to leave risk assets like crypto (a headwind); when it weakens, money has tended to flow back (a tailwind).
What is the dollar index?
A single number for the value of the US dollar against six major currencies such as the euro, yen and pound. A rising number means the dollar is getting more expensive worldwide; a falling number means its strength is fading.
Why is a strong dollar bad for crypto?
When the dollar is strong, simply holding safe dollar assets pays off, so investors have tended to pull money out of risk assets like crypto. When the dollar weakens, money has tended to flow toward risk assets in search of higher returns.
How do I use it?
Stretches where DXY climbs steeply are often read as a headwind for the whole crypto market. Rather than a tool for calling direction, treat it as a background gauge of whether the broad environment is friendly to crypto or not.