A stronger U.S. Dollar Index (DXY) typically signals increased demand for the U.S. dollar, which can lead to downward pressure on cryptocurrency prices. Since many cryptocurrencies, including Bitcoin and Ethereum, are priced in USD, a stronger dollar makes these assets more expensive for international investors, reducing demand. Additionally, a stronger dollar may reflect rising interest rates or economic stability, which could divert investment away from riskier assets like cryptocurrencies into traditional financial instruments. However, market sentiment and other factors, such as regulatory news or adoption, can also play a role in crypto price movements.
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