In the turbulent digital currency market today, Bitcoin, as the first superstar, has become the focus of investors' discussion. Some people believe that the key driving force behind the rise of Bitcoin is the weakening of the US dollar index, which has triggered widespread discussion and speculation. So, what impact does the US dollar index have on the trend of Bitcoin? This article will explore this topic in depth and unveil the truth.

The trend of the US dollar index has always been regarded as a barometer of the global financial market. Its fluctuations not only affect the foreign exchange market and the stock market, but also deeply affect the nerves of the cryptocurrency market. When the US dollar index weakens, Bitcoin tends to show an upward trend. What kind of logic is hidden behind this phenomenon? Let's uncover this eye-catching mystery together.

The weakening of the US dollar index means the relative depreciation of the US dollar in the international currency market, which usually triggers investors' favor for risky assets. In this case, investors tend to choose to switch to venture capital, including cryptocurrencies such as Bitcoin. Compared with traditional currencies, Bitcoin is regarded as a safe-haven asset. Its unique decentralized characteristics and scarcity make it popular during market turmoil.

In addition, the weakening of the US dollar index may also lead to rising global inflationary pressures, and as an inflation hedging tool, the value of Bitcoin is often boosted when inflation expectations rise. Investors use Bitcoin, a digital gold, to seek asset preservation and appreciation, which has driven up the price of Bitcoin.

In the past financial history, the inverse relationship between the US dollar index and the price of Bitcoin is not an isolated case. For example, during the 2008 financial crisis, the US dollar index fell sharply, while Bitcoin gradually rose in the following years and ushered in an unprecedented round of gains in 2017. This inverse correlation phenomenon provides investors with a reference to help them make more informed decisions in market fluctuations.

However, it should be noted that the weakening of the US dollar index is not the only factor in the fluctuation of Bitcoin prices. The cryptocurrency market itself is highly volatile and uncertain, and is affected by a variety of factors. Many factors such as policies and regulations, market demand, and technological development may have an important impact on the price of Bitcoin, and simply attributing the rise of Bitcoin to the weakening of the US dollar index may oversimplify the problem.

In summary, the impact of the weakening of the US dollar index on the price of Bitcoin does exist, but it is not an absolute causal relationship. When grasping the market trend, investors need to comprehensively consider the combined impact of various factors and make rational judgments and decisions. As an emerging asset, the market logic and investment opportunities behind Bitcoin are still worth in-depth exploration and research. I hope every investor will overcome all obstacles on the journey of digital currency!

The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

On December 1, only one day after Bitcoin hit a record high of 19888USDT, it suddenly dropped in volume the next night, with the price dropping to as low as 18132.02USDT. With big ups and downs, Bitcoin staged a "roller coaster" market, plummeting by $1,600 in a short period of time, and then quickly rebounded to above $19,200. As of 18:00 on December 2, Bitcoin was quoted at $19,260, with a daily increase of 2.5%.

How do you view such a "roller coaster" market? Observers believe that no matter what the market situation is, it should be noted that digital assets represented by Bitcoin are still in the early stages, and high volatility and high risk are basic characteristics. The recent drastic market adjustments are also in line with the general law of high-level adjustments. Too fast a rise instead contains greater risks.

Since October this year, the Bitcoin trading market has changed from being dominated by retail investors to being dominated by large investors and institutions. This is a major structural change in the trading market since the birth of Bitcoin. With the entry of institutional investors, Grayscale and other institutional investors have become the "engine" of Bitcoin's rise. Recently, many traditional Wall Street capitals have applied to the US SEC for approval to invest in Bitcoin funds.

Huobi Observation believes that the long-term buying behavior of institutional investors stems from the increasing demand for macro risk hedging by institutions. Behind it reflects a phenomenon, that is, the global central bank "floods" and the weakening of the US dollar index. The market predicts that there may be high inflation next year, and the actual yield of assets such as bonds will be very small or even negative, making Bitcoin an important asset target for overseas institutions.

BTC fell and rebounded during the day, or tried to break up again

According to the data of Huobi trading platform, BTC continued its downward trend in the morning, reaching a low of 18324.50USDT, and then began to rebound. It has basically returned to 2/3 of the decline last night. At the one-hour level, BTC set a new record high last night, reaching a high of 19888USDT, and then began to pull back quickly, falling more than 1,000 points in two hours. It is currently recovering slightly, which may start a new round of upward trend. At the daily level, BTC fell slightly, but it is still at an absolute high. In the evening, continue to pay attention to the changes in trading volume and the breakthrough of 19400 above and the support of 18500 below.

According to the data of Huobi trading platform, ETH also continued the decline in the morning, reaching the lowest point of 575USDT, and then rebounded slightly. It is currently fluctuating and consolidating at the 595 line. At the one-hour level, ETH broke through last night and reached the recent high of 635USDT, then fell back quickly, and was supported at the 575 line, and then began to fluctuate and consolidate. At the daily level, ETH's decline today basically reversed yesterday's gains, but it is still at an absolute high. In the evening, continue to pay attention to the changes in trading volume and the breakthrough of 610 above and the support of 580 below.

In terms of contracts, Huobi contract big data shows that BTC contract holdings have decreased slightly, contract trading volume has increased slightly, and the contract market is active. The basis of delivery contracts has increased slightly, and the funding rate of perpetual contracts has decreased slightly.

ETH contract holdings have decreased slightly, contract trading volume has increased slightly, and the contract market is active. The basis of the delivery contract fell slightly, and the funding rate of the perpetual contract fell slightly.

USDT is quoted at 6.45 yuan in the OTC market of Huobi Global.

According to the data monitoring of Huobi Research Institute, the total locked volume (TVL) of DeFi rose slightly to 17.45 billion US dollars today, and the real locked volume rose slightly to 11.76 billion US dollars. Among them, the head projects did not change much. Today's total Defi transaction volume fell slightly to 723 million US dollars. Among them, 1inch V2 rose significantly, reaching 26.31%.