## What Is the DXY Index and Why Do Crypto Investors Need to Pay Attention

To better understand the cryptocurrency market, many people overlook a very important indicator in the global economy — the **DXY index or USD Index**. This is not a complicated concept that you should ignore. In fact, this index has a direct impact on the price of Bitcoin and other cryptocurrencies.

### USD Index (DXY) Built From What?

**The DXY index measures the relative strength of the US dollar** compared to a basket of 6 major currencies from countries that are major trading partners of the US. Fluctuations in these currencies — including the euro, Japanese yen, British pound, and others — will cause certain changes in the value of the DXY.

When you follow financial news, you will notice that the USD Index often fluctuates. These fluctuations are not random but reflect complex interactions among the world's major economies.

### The Relationship Between DXY and Bitcoin

The important question is: does the DXY index influence the Crypto market? The answer is **yes, and quite clearly**. Bitcoin and USD show a **negative correlation** that is quite stable.

The key point is that Bitcoin along with gold are considered value storage assets that the investment community closely monitors. When the USD appreciates (DXY increases), investors tend to sell Bitcoin to hold stronger currencies. Conversely, when the USD weakens (DXY decreases), Bitcoin often enters an upward phase as investors seek alternative assets to protect their value.

Therefore, following **what is the DXY index** and where it is heading will help you gain deeper insights into Bitcoin trends and the entire cryptocurrency market.