Bitcoin Bulls Eye Weaker Dollar, But Historical Chart Pattern Urges Caution

The U.S. dollar index saw a sharp decline of over 10% during the first half of 2025, sparking hope among bitcoin (BTC) enthusiasts that continued dollar weakness could fuel further gains in crypto markets through the second half of the year.

Yet, a key technical chart pattern suggests traders should be cautious before fully embracing bearish dollar bets. The dollar index’s weekly chart reveals that the 50-week simple moving average (SMA) is on the verge of crossing below the 200-week SMA—a formation known as the “death cross.”

Although this ominous-sounding signal is often viewed as a harbinger of long-term weakness, historical evidence shows it has frequently been a bear trap for the dollar, signaling market bottoms and subsequent reversals to the upside.

Data indicates the dollar index (DXY) has printed four weekly death crosses since 2009, each one coinciding with the end of downtrends (highlighted by vertical lines on charts) and preceding significant rallies.

The most recent death cross occurred in January 2021, marking a low near 90 on the index. From there, the dollar gained momentum over the following months, eventually climbing to over 114.00 by September 2022.

Of course, price patterns are never guaranteed to repeat, so the approaching death cross may not trap dollar bears this time around. Still, traders who keep this historical tendency in mind may better manage their positions and avoid being caught off guard.

The dollar index—which measures the greenback’s performance against a basket of major currencies—fell by 10.78% in the first half of 2025, marking its steepest decline since 1991.