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Revisiting recent history illustrates how shifts in dollar strength have impacted crypto valuations. In 2017, the DXY peaked just before a significant drop in value, which coincided with a massive increase in global liquidity. This period marked the beginning of a bullish run for Bitcoin, which skyrocketed from approximately $1,100 to nearly $20,000 in under a year.
Upon observing the charts from 2020-2021, similar trends emerge. A significant plunge in dollar strength occurred in March 2020, leading to an explosive increase in Bitcoin's value, reaching an all-time high near $69,000 by November 2021. In both instances, a falling DXY preceded a surge in cryptocurrency values, establishing a strong correlation between dollar performance and market sentiment for riskier assets.