Yesterday, the US dollar index (DXY) returned to crucially low levels, following the Fed’s speech on Thursday afternoon, which could be a key trigger for Bitcoin (BTC).
Impact of the Fed’s recent announcement on Bitcoin
Bitcoin on the verge of another bullish run
For those who do not know the index, the DXY is a measure of the value of the US dollar in relation to a basket of foreign currencies. Therefore, as the index increases, it means that the US dollar gains „strength“ compared to other currencies.
In this sense, the DXY stood at 92.28 at the close of the markets yesterday. This is its lowest level since August 19, as we can see in the TradingView graph.
Basically, experts consider that it was Jerome Powell’s speech that collapsed the recovery that the index had shown.
As we mentioned earlier, this fall translates into a loss of value for the U.S. dollar, and therefore could be a key trigger for Bitcoin, gold and other safe havens.
In fact, we’ve seen before how, as the DXY fell, gold and Bitcoin peaked. Will they do it again?
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Raoul Pal, CEO of Real Vision, said on Twitter that the speech of the president of the Crypto Trader turned out to be a confirmation that gold and Bitcoin have a bright future ahead of them.
Certainly, Pal sees that gold has potential, although, Bitcoin’s performance will be well above that of the precious metal.
„Most people don’t understand the latter, but simply put, Powell has shown that there is ZERO tolerance for deflation, so they’ll do ANYTHING to stop it, and that’s good for the two hardest assets: gold and Bitcoin. Powell WANTS inflation,“ he said on Twitter.
The trader filbfilb commented on the event on Twitter by making a joke about what the fall in the index represents for the U.S. dollar.