It's Bitcoin Season

You know what the biggest news in crypto today is: We have a new Bitcoin ATH.

Olivia Capozzalo and Camila Russo report on the cryptocurrency market trends, highlighting a striking shift in favor of Bitcoin.

With the U.S. Dollar Index falling below 100 for the first time since 2022 following Moody’s downgrade of America’s sovereign rating, the narrative of the weakest dollar yet is unfolding. This scenario, often envisioned by Bitcoin maximalists, presents an interesting macroeconomic backdrop.

As the administration continues to rack up debt, putting pressure on the deficit, the outlook for the dollar remains bleak. This weakness, in turn, could benefit Bitcoin, which maximalists prefer over government-issued currencies due to its limited supply and non-national character.

The scenario is unfolding exactly as maximalists have long claimed it would, varying slightly in their predictions. Nevertheless, the core thesis remains the same: in a world of massive unpayable debt and a rapidly depreciating dollar, an asset like Bitcoin, with a capped supply and no ties to a single nation, might be able to step in as a neutral store of value.

However, despite the strong narrative potential, there are some issues. For instance, while the Bitcoin price is often discussed in terms of a rally, it's worth noting that the bulk of the recent price increase occurred during a period of inactivity in the U.S. stock market.

Moreover, with the exception of a brief period in January, the total cryptocurrency market cap has remained below $1 trillion for the past 18 months, even as BTC's market dominance hit 63.2%, the highest since the frothy days of January 2021.

In contrast, Ether (ETH) slipped to just below 9%, rebounding slightly from its dip to as low as 7.1% last month. The "Others" bucket, encompassing everything other than BTC or ETH, decreased to around 27%, a level not seen since March 2021.

This phase of the cycle, whatever name we choose to give it, is certainly not an alt season; it's BITCOIN SEASON.

Here are a few highlights from the past 24 hours:

* The U.S. Dollar Index dropped below 100 for the first time since 2022 on Wednesday.

* The news comes after Moody’s downgraded America’s sovereign rating last week due to concerns that the U.S. debt will continue to climb, putting further pressure on the deficit.

* The last time the greenback's measure against six major peers closed below the critical 100 level was in December 2021.

Here are more details on the news:

* According to analysts at ING, the U.S. Dollar Index fell to 99.98 in early U.S. trading on Wednesday.

* The index, which tracks the dollar against the euro, British pound, Japanese yen, Swiss franc, Canadian dollar and Swedish krona, has been trading above 100 since November 2021.

* Last week, Moody’s downgraded America’s sovereign rating by one notch to A1 from Aa3. The rating agency also changed the outlook on the U.S. to negative from stable.

* The move came as the administration is expected to continue spending, which will, in turn, pressure the deficit.

* According to economists polled by Dow Jones, the U.S. economy grew at an annualized rate of 1.8% in the first quarter of 2023.

* Economists also project that the unemployment rate will tick up to 3.7%, while they anticipate a 0.2% rise in the core Consumer Price Index.

* They also predict that the Federal Reserve will leave interest rates unchanged in the second quarter after the central bank raised the benchmark by 25 basis points at its last meeting in May.

The post U.S. Dollar Index Drops Below 100 For First Time Since 2022 appeared first on Benzinga.