Rawl
Crypto Investor, Macro Analysis
The US dollar index may extend a little further to 105.8 before heading down to 93-95, following the same playbook as before Trump's election, when it was searching for macro exit liquidity and then fell after he took office. As in late 2024, when crypto rallied while the dollar climbed, bitcoin could reach $90,000-100,000 before the midterms with the DXY near 105.8. Longer term, a world moving toward stable peace would reduce safe-haven demand and weaken the dollar. x.comÂ
The dollar's longer-term prospects are very negative: 2008 showed the dollar-based system was built on quicksand, and 2026 showed the US has lost its leadership of the Western-oriented world. Both are very positive for gold. First, though, the dollar might rise on a flight to liquidity. x.com x.com x.comÂ
The US dollar looks set for a multi-year bear cycle because a multipolar world needs fewer dollars. Reserve managers are diversifying, trade settles in more currencies and central banks accumulate gold instead. Against an equally weighted basket, the dollar's half-century sequence of lower secular highs is topping again on its 7-to-10-year cycle. Every major commodity bull of the past century ran alongside a falling dollar, which could also bring a second inflation wave. x.comÂ
The US dollar should go higher because the Fed will have to hike and oil is rising, keeping a 105 DXY target intact. Long-end yields rose by the equivalent of a rate hike even as the short end fell. Recent weakness looks like a positioning unwind plus a suspected Bank of Japan yen intervention, a 3.5% move in two hours. The 100 range on DXY needs to hold. x.com x.comÂ
Bitcoin is likely to be hit hard in the scenario expected next year, with the dollar index now seemingly certain to reach 108-110. @AtlasShrug1 warns that a dollar index at those levels would make it tough for bitcoin and could bring a retest of the lows. x.com x.comÂ
The dollar cycle has likely peaked because the Fed's next move is going to be a cut. Supply-shock demand destruction is doing the Fed's job and a strong dollar is doing the rest, so rates should fall, the dollar weaken, and duration assets, commodities and emerging markets reprice. A soon-ish end to the war should work against this view, but even if it drags on much longer, the rates curve has priced it in through the end of 2026. x.comÂ
The US dollar is supported by hawkish comments from Fed Chair Kevin Warsh, which led traders to sharply increase bets on a rate hike as soon as September. The Dollar Index trades around 99.6 after a sharp rise in the previous session. x.comÂ
Early Treasury buying is mostly domestic, so falling rates can coincide with a falling US dollar. Foreign buying is expected later in the bust, when the dollar should reverse sharply higher; this does not bring the previously forecast dollar rebound forward. x.comÂ
The dollar looks set to sell off into CPI, with Treasury Secretary Bessent likely to step in again on a cool or in-line print. @Barchart notes the dollar has already wiped out the July 31 Treasury intervention. Follow-through intervention, selling into a weak tape, is well documented back to the 1998 Asian currency crisis, and with it hovering close enough to 160, further intervention makes sense. x.com x.comÂ
The dollar should catch a monster bid before any structural weakness, because fiat is a menu of bad choices and in a deleveraging no one reaches for euros or renminbi. If the US concludes it will not win in AI, there is a high probability the next step is to tank everything, and the dollar and US bonds would then be bid; the yen could also rise as carry trades unwind. Dollar strength comes first and leads to structural dollar weakness on the other side. x.com x.comÂ
The pause in attacks until the November 3 midterms is the catalyst for the next leg up in risk assets, including bitcoin, US small caps and long-dated Treasuries. x.comÂ
