The US Dollar Index is showing one of its largest long term declines in recent history
DXY is now down around 15 percent from its 2022 peak and is currently trading near the 97 level
A similar drop was last seen back in 2017
At that time the weakening dollar was followed by improving global liquidity conditions.
Risk assets slowly started to gain attention
Crypto markets also benefited as liquidity moved away from safety and into growth.
Bitcoin was trading at much lower levels during that period
Over the following months increased liquidity and risk appetite supported a strong upside move.
This chart highlights an important relationship
When the dollar stays strong capital usually stays defensive
When the dollar weakens capital often looks for higher return opportunities.
It does not mean markets move instantly
But shifts in currency strength often act as early signals for broader changes in market behavior.
Watching the dollar can help understand where liquidity may flow next
Especially during larger macro transitions.
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