There is an interesting historical pattern with the US dollar—once it starts depreciating, it often declines for two consecutive years. Last year, the US dollar index already fell by 9.4%. Based on this trend, it might drop another approximately 8% this year, potentially returning to the 95 level.

The reference sample for this prediction is 1995. That year had a very similar background: a booming tech bubble, a soft landing for the economy, and the Federal Reserve entering a rate-cutting cycle. In the end, the dollar indeed weakened. Will history repeat itself? From a technical perspective, all conditions align.

What does dollar depreciation mean for us in the crypto space? Simply put, the weaker the dollar, the more favorable it generally is for Bitcoin and other cryptocurrencies.

**The first logic is risk aversion shifting.** When the dollar’s purchasing power shrinks, smart capital looks for alternatives to protect assets. Bitcoin, as “digital gold,” tends to attract safe-haven funds during such times. Historically, during periods of dollar weakness, BTC has shown relatively strong resilience.

**The second logic is abundant liquidity.** Dollar depreciation is usually accompanied by loose global liquidity—central banks may continue to cut rates or ease policies. When there’s more dollar liquidity in the market, funds are more likely to flow into high-risk, high-reward assets. Ecosystem tokens like ETH, SOL, and promising projects like RNDR with AI concepts become destinations for capital seeking growth.

**But a word of caution.** When market consensus is too uniform—such as everyone betting on “the dollar will fall”—it often signals an impending reversal. Whether the dollar ultimately declines depends on the decisions of the Federal Reserve Chair and changes in the international economic situation. A policy shift can instantly turn expectations around.

From a practical standpoint, you can do this: incorporate the dollar’s trend into your macro observation framework, and don’t focus solely on crypto price movements. Think about this: if the dollar truly enters a depreciation phase, besides safe-haven assets like BTC, which sectors will benefit the most—public chain ecosystems, AI applications, or DeFi tools? Then, adjust your allocations according to your risk tolerance. Of course, this is just an analytical framework; the final decision should consider your actual situation—don’t follow the trend blindly.