{"id":130654,"date":"2026-01-28T15:00:46","date_gmt":"2026-01-28T15:00:46","guid":{"rendered":"https:\/\/mycryptomania.com\/?p=130654"},"modified":"2026-01-28T15:00:46","modified_gmt":"2026-01-28T15:00:46","slug":"whats-going-on-with-the-us-dollar-and-how-does-it-affect-bitcoin-ethereum-prices","status":"publish","type":"post","link":"https:\/\/mycryptomania.com\/?p=130654","title":{"rendered":"What\u2019s Going On With The US Dollar And How Does It Affect Bitcoin, Ethereum Prices?"},"content":{"rendered":"

The Bitcoin and Ethereum prices rallied after reports of the US dollar crashing spread across the market. Recent data show that the US dollar has fallen to its lowest level in four years, raising concerns about the strength of the world\u2019s dominant reserve currency. As the dollar weakens<\/a>, market players are beginning to shift attention to alternative assets such as precious metals and digital currencies, including BTC, which is increasingly viewed as a potential hedge<\/a> against rising inflation and currency depreciation.\u00a0<\/p>\n

US Dollar Falls To Lows Not Seen In 4 Years<\/h2>\n

New reports from Bloomberg highlight the relentless slide in the US dollar index (DXY) over recent weeks, with the price tumbling further after President Donald Trump\u2019s comments on the currency\u2019s performance. Sources reveal<\/a> that Trump said the dollar is \u201cdoing great,\u201d despite its ongoing downturn.\u00a0<\/p>\n

Traders interpreted the President\u2019s seemingly indifferent response to the declining dollar as a signal that the slide could continue, triggering further selling pressure. Data from the web-based stock market research platform Finviz shows<\/a> that, as of writing, the US dollar index has crashed<\/a> to 95.92 from a previous level near 100. This marks<\/a> its weakest level in nearly four years, specifically since 2022.\u00a0<\/p>\n

Additionally, Bloomberg reported<\/a> that its Dollar Spot Index also recorded its lowest four-day decline since Trump announced new tariffs in April 2025. Traders in the $9.5 trillion per-day currency markets are also increasingly betting that the dollar could decline further, as US policy risks<\/a> weigh on the world\u2019s primary reserve currency.\u00a0<\/p>\n

Amidst the decline in the US dollar index, cryptocurrencies like Bitcoin and Ethereum are posting gains. BTC\u2019s price rose<\/a> above $89,000, while Ethereum has climbed more than 3% to reach above $3,000, in the past 24 hours. This simultaneous rally in cryptocurrencies alongside the weakening US dollar suggests that investors may be shifting capital to risk-on assets<\/a>.\u00a0<\/p>\n

Market analyst \u2018Master of Crypto\u2019 recently outlined<\/a> several reasons behind the continued decline in the weakening US dollar in a post on X. He explained that large budget deficits<\/a>, the FED\u2019s challenge of balancing inflation control with job market stability, steady bond supply, and FX hedging activities are keeping the US dollar near recent lows. According to him, in this type of market environment, holding idle cash becomes a significant risk for investors.\u00a0<\/p>\n

Possible Implications For The Bitcoin And Ethereum Price<\/h2>\n

Historically, periods of US dollar weakness have often coincided with rallies in Bitcoin<\/a>, and other cryptocurrencies. When the dollar declines, investors sometimes seek alternative assets to preserve value. This can increase demand for Bitcoin and Ethereum, which are viewed by many as alternative stores of value<\/a> and risk-on assets.\u00a0<\/p>\n

While this correlation is not a clear indication of a potential cryptocurrency rally, analysts like \u2018Milk Road Macro\u2019 suggest<\/a> that the declining dollar could help support a broader crypto market recovery. He said that as the dollar weakens, capital will flow into precious metals like gold and silver. Soon after, this same capital is expected to rotate into BTC<\/a>, potentially fueling a price rebound.\u00a0<\/p>","protected":false},"excerpt":{"rendered":"

The Bitcoin and Ethereum prices rallied after reports of the US dollar crashing spread across the market. Recent data show that the US dollar has fallen to its lowest level in four years, raising concerns about the strength of the world\u2019s dominant reserve currency. As the dollar weakens, market players are beginning to shift attention […]<\/p>\n","protected":false},"author":0,"featured_media":130655,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-130654","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-discovery"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/130654"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=130654"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/130654\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/media\/130655"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=130654"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=130654"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=130654"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}