Analyst stated about a "very favorable" period for Bitcoin

The news is being updated. The extremely low dollar index (DXY), along with the historical high of US national debt, should serve as "fuel" for the rally of the first cryptocurrency, believes the contributor to CryptoQuant under the nickname Darkfost.

According to his observations, DXY is trading 6.5 points below the 200-day moving average.

"This is the largest deviation in 21 years," emphasized Darkfost.

US National Debt and other macro indicators. Data: US Debt Clock The analyst noted that such dynamics, "despite seeming anxiety," usually benefits risk assets like Bitcoin. According to him, a correlation has long been observed in traditional finance: when the dollar weakens and "loses attractiveness as a safe asset," investors reassess their portfolios and shift capital to alternative instruments.

The dynamics of M2 money supply growth against the backdrop of the "barometer of the American economy" — the S&P 500 index. Data: StreetStats. The provided Darkfost chart "illustrates this phenomenon," showing periods when the DXY trades below its 365-day moving average.

"Historical data shows that similar periods have been favorable for Bitcoin. Currently, the dollar index is weakened, which may support a new rise in BTC, however, the price has not reacted yet," noted the researcher.

He added that the aforementioned tool allows for the recognition of early stages of a bullish trend and moments of euphoria "not so much through technical signals, but by reflecting the influx of liquidity into the crypto market."