Usman Salis
The US Dollar Index is approaching a structural turning point after months of sideways movement. Crypto analyst BitBull argues that the downtrend phase is complete, accumulation has been underway, and the next move may be a full expansion - a shift with meaningful consequences for both BTC and SPY.
The pattern follows a textbook three-phase cycle: a prolonged downtrend, a period of price stabilization, and then a directional breakout. According to this framework, DXY has already passed through the first two stages and is now entering the third.
From downtrend to accumulation: how DXY lost momentum in early 2025
Through the first half of 2025, the Dollar Index moved steadily lower, printing lower highs and lower lows as broad dollar weakness persisted across global markets. That selloff eventually ran out of steam and gave way to a prolonged sideways range - the accumulation phase described in the analysis - where price stabilized rather than continued lower.
Downtrend phase appears complete, accumulation has been ongoing, and the next phase may be expansion.
This type of base-building after an extended decline is a recognized precursor to renewed trend activity. The longer the range holds, the more energy tends to build behind the eventual move.
DXY range structure: resistance near 100 holds the key
Within the current structure, DXY has been oscillating between support in the mid-90s and resistance near the 100 level - a ceiling the index has repeatedly failed to clear over the past year. That round-number zone carries significant psychological and technical weight for dollar watchers. Price has returned to this boundary multiple times, each test reinforcing its relevance as a decision point.
Previous approaches to this area have resulted in sharp pullbacks. For detailed context on how earlier tests played out, see:
- DXY tests key 100 resistance level
- DXY rejected at resistance near 100
- DXY long-term rally pattern returns
DXY is nearing the point where a breakout from the range could occur - and historically, prolonged consolidation near major resistance often precedes a strong directional move.
DXY expansion phase and what it means for BTC and SPY
If the expansion phase materializes, the ripple effects could be broad. A strengthening dollar historically coincides with headwinds for risk assets - tighter global liquidity conditions tend to pull capital out of crypto and equities alike. The analysis specifically flags downside pressure on BTC and SPY as a likely byproduct of a DXY breakout.
This relationship is not mechanical, but the correlation has shown up repeatedly over multi-year cycles. When the dollar moves with conviction, markets paying attention to macro flows tend to react accordingly.
A potential expansion in DXY could coincide with downside pressure in crypto and equities, reflecting a broader relationship where shifts in dollar strength influence global liquidity and risk sentiment.
For now, DXY remains inside its established range. But the structure - a completed downtrend, a sustained accumulation base, and repeated tests of the 100 resistance ceiling - sets the stage for a resolution. The direction of that resolution may well define the next major trend across multiple asset classes.
Usman Salis
