XRP is trading above $2 after retreating from early January highs near $2.40, and analysts argue the US Dollar Index is approaching a structural zone that has historically preceded the token's largest rallies.
What Happened; Dollar Index Pattern
Crypto analyst Bird shared technical analysis on X identifying three previous periods — 2017, 2021, and 2024 — when sustained weakness in the DXY coincided with aggressive upside moves in XRP.
The DXY, or US Dollar Index, measures the value of the American dollar against a basket of six major foreign currencies including the euro, Japanese yen, and British pound.
The pattern suggests XRP responds to macro conditions rather than token-specific developments.
When dollar dominance fades, capital tends to rotate into crypto assets.
The late-2017 cycle saw XRP rally to the mid-$3 range during a weakening dollar backdrop, while the 2020-2021 period produced a surge to $1.90 at the cycle top. The first half of 2025 culminated in XRP reaching its current all-time high of $3.65 in July.
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Why It Matters; Macro Decision Point
The DXY currently sits around 99, a level Bird identifies as a decision point for market direction.
If the index weakens and begins printing red candles, the historical pattern suggests conditions become supportive for another XRP leg higher, potentially above $3.65 within months. A strengthening dollar would signal the opposite, with tighter liquidity conditions likely keeping XRP capped in consolidation around $2.
The next move in the dollar will determine which scenario unfolds.
In the meantime, technical analyst ChartNerd identified that XRP has printed a "Golden Cross" on the 5-day MACD, which occurs when the MACD line crosses above the signal line.
The histogram has also switched from red to green.
The last time this signal printed was in July, where XRP rallied to a new ATH.
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