The U.S. Dollar Index (DXY) is down again on Tuesday, trading not far above its 2025 low.
After a sharp rise in the weeks following the election of Donald Trump in November 2024, the greenback fell sharply throughout the first half of 2025 and remained in an unstable trend near its multi-year lows in recent months.
The dollar’s sharp decline in 2025 was initially accompanied primarily by an expected broader market reaction, with things like stocks, gold and bitcoin. all rising sharply to reach new records.
The story since October, however, has been somewhat different – stocks and other hard assets have continued to rise – in fact, gold, silver and copper all rose sharply again on Tuesday to hit new record highs – but bitcoin and the broader crypto markets have suffered sharp bearish moves.
What could be next for the dollar
The DXY Index is now trading just above a major long-term support level that dates back to the 2008 global financial crisis. This level has been tested and held several times, most recently in July and September of this year.
As several foreign central banks, including the Bank of Japan, move toward monetary tightening, the U.S. Federal Reserve faces increasing pressure, including from President Trump, to lower interest rates. This divergence raises the possibility that the dollar could fall below this major support.
Although dollar weakness this year has yet to have a salutary effect on bitcoin, a breakdown of this long-term support could perhaps be the news that finally triggers a reversal in the crypto’s downtrend.
