Dollar Index Death Cross Signals Caution for Bitcoin Bulls, Analysts Say

Bitcoin Traders Eye Slumping Dollar, But Technical Signal Hints at Possible Rebound

The U.S. dollar index has tumbled over 10% in the first half of 2025, raising optimism among bitcoin (BTC) investors that a weaker dollar could help drive crypto prices higher in the coming months.

However, technical signals suggest traders should tread carefully before fully committing to bearish positions on the dollar. On the weekly chart, the dollar index is close to forming a “death cross,” where the 50-week simple moving average (SMA) dips below the 200-week SMA—a pattern that often signals prolonged weakness.

Despite its ominous name, historical data shows the dollar’s death crosses have often signaled the end of downtrends rather than the beginning of extended declines. In fact, since 2009, there have been four weekly death crosses on the dollar index, each coinciding with a market bottom and followed by a notable rebound.

The last death cross emerged in January 2021, around the index level of 90. Afterward, the dollar rallied significantly, eventually reaching over 114 by September 2022.

Of course, chart patterns are not foolproof, and the current setup may play out differently this time. Still, traders mindful of this historical pattern may avoid getting trapped in overly bearish dollar bets.

The dollar index, which tracks the value of the U.S. currency against a basket of major global currencies, dropped 10.78% in the first half of 2025, marking its steepest six-month decline since 1991.