US Dollar Index (DXY) Falls to 100.85; Bitcoin To Benefit From Drop

A lot has happened in the crypto market over the last 24 hours. Bitcoin grabbed attention over the weekend by closing its highest weekly candle ever. Along with this, the market saw massive liquidations worth $650 million, as both long and short positions were wiped out. First, Bitcoin’s sudden jump forced out short traders, and then a quick correction took down long positions too.

Even with all this price action, Bitcoin is still in a strong uptrend, holding on to important support levels. While Bitcoin is showing strength, Ethereum has been lagging behind.

Macro Shift?: US Credit Downgrade by Moody’s, Weaker Dollar Helps Bitcoin

According to a macro researcher, beyond technicals, broader market dynamics are starting to favor Bitcoin too. Last week, Moody’s downgraded the US government’s credit rating from AAA to AA1, citing rising deficits and ballooning interest costs.

The news sent the US Dollar Index (DXY) tumbling to 100.85. A weaker dollar typically supports alternative assets like gold — which edged up 0.4% — and often spills over to Bitcoin, which many investors now view as a digital alternative to traditional safe-haven assets.

Source: Axel/X

Mixed Signals: Rising Treasury Yields Create Cautious Market Tone

That said, the macro backdrop is mixed. Yields on 10-year US Treasuries climbed higher, reflecting a growing risk premium tied to fiscal concerns. This combination of a softening dollar and rising yields has dampened equity and corporate bond appetite, creating a cautious, risk-off tone across markets.

Yet in this climate, Bitcoin’s unique positioning as both a risk asset and a store of value could work in its favor. The “digital gold” narrative has grown stronger in recent years, and with the dollar under pressure, Bitcoin may attract increased interest from those seeking alternatives to traditional fiat-based investments.

Bitcoin’s Next Moves: Key Support and Resistance Levels to Watch

Right now, Bitcoin is testing resistance around $105,000 and $106,000, with more hurdles between $108,000 and $109,000.

Source: TradingView

On the flip side, Bitcoin has solid support between $102,000 and the $96,000–$98,000 range — a zone that once acted as resistance and is now a strong safety net for the bulls.