The US Dollar Index falls below the 99 psychological level, and the crypto market enters a depreciation window

The US Dollar Index DXY broke below the key psychological level of 99 today, with an intraday decline of 0.18%. This is not only an important technical breakthrough but also further confirms the expectation of a weakening dollar. For the cryptocurrency market, dollar depreciation is usually a bullish signal, as investors seek alternative assets with higher yields.

Why Breaking Below 99 in DXY is Critical

Important technical breakthrough

The 99 level in the US Dollar Index is a clear psychological and technical threshold, widely watched by the market. Falling below this level confirms the downtrend of the dollar and may attract technical traders to short the dollar. Once such key levels are broken, they often trigger chain reactions.

The practical implications of dollar depreciation

A weakening dollar reflects several possible market signals: first, an improvement in global liquidity conditions; second, increased risk appetite; third, potential adjustments in Federal Reserve policy expectations. These factors can drive investors to reallocate assets from safe-haven dollars to higher-yielding asset classes.

Impact Pathways of Dollar Depreciation on the Crypto Market

Key Market Points of Attention

• Where is the support level after DXY breaks below 99, determining the sustainability of dollar depreciation
• Performance of other major currencies (Euro, Yen, etc.), reflecting the breadth of dollar depreciation
• Linkage with commodity prices, as a weaker dollar usually pushes up commodity prices
• Actual capital flows in the crypto market, whether there is genuine incremental capital entering

Possible Subsequent Trends

If the US Dollar Index continues to decline and breaks more technical levels, the crypto market could see stronger upward momentum. However, it’s important to note that dollar depreciation is not one-way; policy changes, economic data, and other factors can alter the trend. Meanwhile, the fundamentals of the crypto market itself are also crucial, and one should not rely solely on the dollar’s weakness.

Summary

Breaking below 99 in the US Dollar Index is a significant technical breakthrough, indicating further confirmation of the dollar’s depreciation trend. This could be a potential bullish signal for the crypto market, as a weaker dollar often encourages increased allocation to risk assets. However, this is only a favorable condition; the actual performance of the crypto market will also depend on its fundamentals and market sentiment evolution. Future focus should be on whether the dollar index can continue to decline and how long this depreciation trend can last.