#US_dollar squeeze and $19K BTC: 5 Things to watch in #Bitcoin this week

Bitcoin (BTC) starts another week at near historic highs as the U.S. dollar continues to drop — what’s next?

With investors seeking safe havens and Bitcoin already seeing a demand squeeze, Cointelegraph covers the factors that could further shape price action this week.

DXY descends to familiar lows

News from the U.S. that mass vaccination against the Coronavirus may begin within a month has sent investors panicking for hedge assets.

With multiple candidates now available among potential vaccines, the mood is tending towards worldwide recovery emerging, which means the dollar becomes less appealing compared to other destinations.

“The vaccine news is favoring the view of a sooner-rather-than-later global economic recovery with the USD losing its safe haven appeal along the way,” Rodrigo Catril, a currency strategist at National Australia Bank, told Bloomberg.

“This is a risk-positive, USD-negative backdrop, especially with the Fed likely to remain ultra-dovish for some time.”

The U.S. dollar currency index (DXY), which tracks USD against a basket of twenty trading partner currencies, has fallen lows seen twice since August, with monthly losses totalling nearly 2.2%.

As Cointelegraph often reports, DXY tends to show an inverse correlation to Bitcoin, meaning protracted weakness comes in tandem with stronger BTC/USD performance.

U.S. dollar currency index 3-month chart. Source: TradingView

The outlook for the dollar remains uncertain thanks also to the risk of fresh