Dollar Decline Paves the Way for Bitcoins Upsurge Amid Positive Market Sentiment

The cryptocurrency market is bracing itself for a significant price shift. The U.S. Dollar Index (DXY) has dropped to a two-year low, while on-chain metrics indicate a hidden accumulation of Bitcoin and a supply shortage.

For the first time since early 2022, the DXY has fallen below the 98 mark. A weaker dollar traditionally fosters a favorable environment for riskier assets, such as cryptocurrencies, as noted by CoinDesk’s senior analyst, James Van Straten.

This decline in the index stems from new inflation data in the U.S., which showed an annual rate of 2.4%, falling short of analysts’ predictions of 2.5%. This has bolstered market expectations for a loosening of the monetary policy by the U.S. Federal Reserve.

According to CME FedWatch, 97% of traders anticipate that the Federal Reserve will maintain its current key interest rate during the upcoming meeting.

Additionally, discussions about dedollarization and uncertainty surrounding U.S. trade policy are putting further pressure on the American currency.

In the context of positive macroeconomic conditions, Bitcoin’s on-chain data signals a shrinking supply. Despite low activity from retail investors and recent negative funding rates, larger players continue to accumulate the asset.

The quantity of coins held in centralized exchange wallets is still declining. Since the start of 2025, this figure has decreased by 14%, reaching 2.5 million BTC — the lowest level since August 2022.

Over-the-counter (OTC) platforms, which are utilized for large transactions, are also experiencing a supply crunch, with their reserves hitting an all-time low.

According to CryptoQuant, since January, the balances of wallets associated with the miner OTC segment have fallen by 19%, totaling 134,252 BTC.

It’s important to note that, at the end of May, analysts observed a shift of Bitcoin whales from accumulation to selling.