Bitcoin's Rise Amidst Decline of U.S. Dollar Index in 2024
All Eyes on Bitcoin Following DXY's New Lows
In a crucial shift, Bitcoin (BTC) has reclaimed the $61,000 mark, coinciding with the U.S. Dollar Index (DXY) plummeting to fresh lows in 2024. This development has sparked renewed interest in Bitcoin, particularly given its significant correlation with global liquidity.
DXY Records New 2024 Lows: A Look at Macro Drivers
The U.S. Dollar Index has been on a downward trend, recording lower highs since June and recently breaking below January's low of $101.340, ultimately dropping to $100.923. As of now, it trades at $101.311. A falling DXY typically signals bullish sentiment for risk assets such as Bitcoin.
The Relationship Between DXY and Global Liquidity
Simultaneously, global liquidity metrics, measured by M2, are trending upwards. M2 reflects the total money available in the economy, a vital factor influencing risk assets like Bitcoin. The correlation between Bitcoin's price and M2 expansion underscores Western market sentiment and economic conditions. Increased M2 indicates a loose monetary policy, fueling further investment in cryptocurrencies.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.