According to a new analysis published by CryptoQuant, Bitcoin may be entering the longest market cycle in its history, supported by early signs of a global macroeconomic shift that could soon favor risk assets.
Analyst Darkfost highlighted a chart correlating Bitcoin’s price movements with the U.S. dollar index (DXY) and bond yields, calling it one of the most crucial indicators for assessing Bitcoin’s long-term direction. The data suggest that BTC’s performance remains tightly linked to the broader monetary environment, thriving when liquidity expands and macro conditions ease.
The report points to several emerging trends that could set the stage for Bitcoin’s next major phase:
- •A weakening U.S. dollar: Bitcoin typically performs best when the DXY declines, a scenario predicted by President Donald Trump, who has advocated for a softer dollar to boost U.S. exports. While this drop has not yet occurred, a sustained decline could serve as a key bullish catalyst.
- •A potential Fed pivot: The Federal Reserve appears to be shifting toward a more accommodative stance, with rate cuts expected in the coming months.
- •Falling bond yields: Long-term U.S. Treasury yields have begun to decline since May, most now sit below 4%, excluding the 30-year, signaling growing institutional demand for bonds as investors anticipate future monetary easing.
Market Conditions and Future Outlook
Since the current Bitcoin cycle began, the market has operated under unfavorable macro conditions, high rates, a strong dollar, and tight liquidity. However, CryptoQuant notes that the data now indicate an early monetary pivot that could redirect institutional capital from bonds into risk assets like Bitcoin.
Darkfost concludes that while this transition will unfold over several months, it may extend Bitcoin’s bull phase beyond prior cycles, marking the beginning of what could be the longest and most structurally resilient Bitcoin cycle to date.