Analysts Caution Bitcoin Bulls as Dollar Index Forms Bearish Death Cross Pattern

Bitcoin Traders Cautious as Dollar Weakens but Death Cross Looms

The U.S. dollar index has slid more than 10% in the first half of 2025, raising hopes among bitcoin (BTC) investors that continued dollar softness could propel crypto prices higher in the months ahead.

Yet technical indicators suggest traders should remain wary before fully betting on a sustained dollar decline. The dollar index’s weekly chart is close to forming a “death cross,” where the 50-week simple moving average (SMA) dips beneath the 200-week SMA—a signal often seen as bearish for the currency’s future performance.

However, past data reveals that these death crosses don’t always mean prolonged dollar weakness. Instead, they have frequently coincided with significant turning points. Since 2009, there have been four weekly death crosses in the dollar index, each aligning with price bottoms followed by strong rebounds.

For instance, the last death cross emerged in January 2021 when the index hovered near 90. From there, the dollar staged a powerful rally, eventually exceeding 114 by September 2022.

Of course, there’s no guarantee that the same pattern will repeat this time. Still, traders who recall these historical signals might avoid getting caught in overly bearish dollar positions too early.

So far in 2025, the dollar index—which tracks the dollar’s value against major world currencies—has fallen 10.78%, making it the steepest first-half drop since 1991.