Pal: Crypto’s Quarter to Shine as Dollar Drops
US Dollar Drops: Good News for Crypto?
The US Dollar Index (DXY) has been going down lately, and this has made some people in the crypto world happy. Raoul Pal, a famous financial expert, thinks this could mean a great quarter for cryptocurrencies. Let’s find out why a falling dollar might be good for crypto.
What’s the US Dollar Index (DXY)?
The DXY is like a report card for the US dollar. It shows how strong the dollar is compared to other major currencies like the euro, Japanese yen, and British pound[5]. When the DXY goes down, it means the dollar is getting weaker compared to these other currencies.
Why Does a Falling DXY Matter for Crypto?
In the past, when the dollar was strong, crypto prices usually went down. But when the dollar got weaker, crypto prices often went up[1][5]. This is because people might invest in crypto when they think the dollar is losing its value. Crypto can be like a safe place to put your money when you’re worried about inflation or economic problems, which can happen when the dollar is weak[5].
What’s Happening in the Crypto Market Now?
In early 2025, the DXY started to drop. On February 14, it went down by 0.5% to 97.23[1]. At the same time, the prices of Bitcoin (BTC) and Ethereum (ETH) went up. BTC rose by 2.02% to $43,000, and ETH increased by 1.79% to $2,850[1]. The number of trades for both BTC and ETH also went up a lot, with BTC’s volume increasing by 15% and ETH’s by 12%[1].
How About Altcoins?
Altcoins, which are other cryptocurrencies besides Bitcoin, also did well when the dollar got weaker. On March 4, 2025, when the DXY dropped to 95.23, altcoins like Ethereum, Cardano (ADA), and Solana (SOL) got more expensive. Ethereum went up by 3.2%, Cardano by 4.1%, and Solana by 5.6%[3].
What Do Technical Indicators Say?
Technical indicators for major cryptocurrencies show that people are buying a lot of crypto right now. For example, the Relative Strength Index (RSI) for Bitcoin is at 65, which means there’s strong buying pressure but it’s not too high[1]. The Moving Average Convergence Divergence (MACD) for Bitcoin also shows that the price is going up[1]. On-chain metrics, like the number of active Bitcoin addresses and the hash rate, also suggest that people are confident in the network[1].
Looking Ahead: A Strong Quarter for Crypto?
Summary and Prediction
When the US Dollar Index goes down, it usually means good things for cryptocurrencies. People might buy crypto when they think the dollar is losing its value. Right now, we’re seeing this happen, with Bitcoin and altcoins getting more expensive. But remember, the crypto market can change quickly, so it’s important to stay alert.
