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Bitcoin (BTC) might get pleasure from a well-known tailwind within the coming weeks and even past if new macro forces proceed to play out.

In a post on X (previously Twitter) on Dec. 14, in style dealer Crypto Ed, founding father of buying and selling group CryptoTA, eyed multimonth lows in United States greenback power.

Bitcoin dealer targets sub-100 DXY dive

Bitcoin and greenback power have up to now exhibited inverse correlation. Whereas this has decreased lately, adjustments to U.S. macro coverage are actually broadly seen to spice up Bitcoin however strain the dollar going ahead.

As Cointelegraph reported, the week’s macro knowledge prints, mixed with encouraging alerts from the Federal Reserve, have analysts pointing the way to further crypto market upside in 2024.

This is thanks to declining inflation potentially allowing for the Fed to “pivot” on interest rate hikes, increasing liquidity to the benefit of risk assets.

An asset not set to enjoy the aftermath of the switch is the dollar, which has declined precipitously this week as macro figures showed the impact of monetary tightening on inflation.

The U.S. Dollar Index (DXY) is down more than 2% since the start of the week, currently below $102 — its lowest level since mid-August.

Commenting, Crypto Ed joined those who are optimistic about Bitcoin while predicting further downside pressure on DXY.

“Long Term Outlook for DXY what will help BTC to teleport to new ATH’s,” he wrote, referring to new all-time highs for BTC/USD.

“DXY to $92.”

U.S. dollar index (DXY) 3-day chart. Source: Crypto Ed/X

An accompanying chart earmarked key levels to look for on DXY in three-day timeframes.

Fed balance sheet creeps higher

On the topic of liquidity, economist Lyn Alden nonetheless argued that conditions were not yet ideal in terms of supporting a broad risk-asset renaissance.

Related: Bitcoin bulls eye BTC price comeback as cash inflows echo late 2020

“Global liquidity indicators started to stall a bit after their recent rise, and reverse repos haven’t drained in the first half of December, but today’s dovish Fed and drop in DXY potentially kickstarted a bit more liquidity,” she told X subscribers on Dec. 14.

Days later, Alden nonetheless famous a “fairly outstanding repricing” by markets taking a look at how the Fed would possibly decrease charges in 2024.

Knowledge from the Fed itself exhibits its steadiness sheet rising for the primary time since August in December — by round $2 billion.

Fed steadiness sheet chart (screenshot). Supply: St. Louis Fed

BTC/USD in the meantime traded at $42,700 on the time of writing on Dec. 15, staying comparatively flat after temporary volatility entered the day prior. The pair stays up 13% in December, per knowledge from Cointelegraph Markets Professional and TradingView.

BTC/USD 1-hour chart. Supply: TradingView

This text doesn’t comprise funding recommendation or suggestions. Each funding and buying and selling transfer entails danger, and readers ought to conduct their very own analysis when making a choice.