Dollar's Historic Plunge Sets Stage for Crypto, But Bitcoin Flashes Near-Term Warning

The global macroeconomic landscape is sending mixed signals to cryptocurrency traders, with the U.S. Dollar Index (DXY) experiencing a historic downturn while Bitcoin (BTC) technical indicators suggest a potential short-term pullback. In the first half of 2025, the DXY, which measures the greenback's strength against a basket of major fiat currencies, plummeted by over 10%. According to data from TradingView, this marks its most severe six-month decline since the third quarter of 1991. This significant weakness has caused the DXY to breach a crucial 14-year ascending trendline. Compounding the bearish outlook, the MACD histogram on the half-yearly chart has dipped below zero, signaling strengthening downward momentum. This has led some analysts to forecast further losses for the dollar. Dan Tapiero, founder and CEO of DTAP Capital, suggested the USD could easily fall another 10% or more over the next 12-24 months, a development he described as a major bullish tailwind for Bitcoin. However, despite this favorable macro backdrop, BTC's immediate price action warrants caution.

BTC Technicals Signal Potential Drop Below $100K

While the long-term picture is buoyed by dollar weakness, Bitcoin's short-term chart presents a more cautious scenario. As of the latest data, BTC is trading around $108,152, down approximately 0.37% over the past 24 hours. The price has recently been rejected from the upper boundary of a bull flag consolidation pattern that has formed over the last six weeks. Technical analyst and Chartered Market Technician Omkar Godbole noted that this rejection is particularly concerning when viewed alongside the 14-day stochastic oscillator. This key indicator is on the verge of crossing below the 80 level, moving out of the overbought territory. This pattern, which mirrors a similar setup seen in early June, often precedes a renewed sell-off. Traders are now watching to see if this confirms a move back toward the lower end of the consolidation range. A successful retest of support could see BTC prices revisit levels below $100,000. For the bearish outlook to be invalidated, Bitcoin would need to achieve a decisive breakout above the flag's upper resistance, which could then open the door for a potential rally toward the $140,000 mark.

Altcoin Underperformance Highlights Market Division

The first half of 2025 has revealed a stark divergence within the crypto market. While the total crypto market capitalization grew by a modest 3% to $3.27 trillion, this figure masks significant underlying weakness in altcoins. Bitcoin was the clear leader, posting a 13% gain and single-handedly propping up the market. In contrast, major altcoins crumbled. Ethereum (ETH) tumbled 25%, currently trading near $2,520 after a 0.69% 24-hour drop. Solana (SOL) fared slightly better but still shed nearly 17% of its value, with its price now at $148.30. The pain was even more acute for smaller, riskier assets, as reflected by the OTHERS index on TradingView, which excludes the top ten cryptocurrencies and plunged by 30%. This performance gap underscores a flight to relative safety within the digital asset space, with capital concentrating in BTC amidst macroeconomic uncertainty and discussions around a potential digital asset strategic reserve under the Trump administration.

Looking ahead, analyst opinions on the second half of the year are mixed. Joel Kruger, a market strategist at LMAX Group, offered an optimistic view based on historical performance, noting that July has typically been a strong month for crypto, averaging 7.56% returns since 2013. He believes the broader setup remains encouraging, especially as the second half of the year has historically delivered outsized gains. This sentiment is shared by Coinbase analysts, who point to a favorable macro environment, potential Fed rate cuts, and growing regulatory clarity in the U.S. as key drivers for future growth. However, analysts at Bitfinex issued a more tempered warning, highlighting that the third quarter has historically been the weakest for Bitcoin, with average gains of only 6% since 2013. They anticipate that subdued volatility could lead to extended range-bound price action, suggesting traders may need to remain patient before a clear market-wide trend emerges.