Bitcoin ‘Mid-Cycle Slowdown’ Looms as Analyst Willy Woo Cites Rising DXY, Flawed M2 Data

Bitcoin’s long-term momentum is showing signs of a mid-cycle slowdown. This, according to analyst Willy Woo, is a direct reflection of a strengthening U.S. Dollar Index (DXY). Woo argues that as the DXY rises, it signals a global “shift to safety” that is now pressuring risk assets.

Willy Woo described the DXY as a more practical gauge for investor sentiment than Global M2. He noted that a stronger U.S. dollar, while declining in long-term purchasing power, remains the primary short-term safe-haven asset.

He argues that risk assets like Bitcoin and the S&P 500 tend to move ahead of liquidity cycles, not follow them. They anticipate changes in liquidity. This, Woo suggests, is why both Bitcoin and equities tend to peak before money-supply growth (M2) crests.

relative dollar strength

Housing-related credit creation adds another layer of distortion. Roughly 30–50% of new M2 originates from mortgage issuance secured by existing real estate. As long as these funds are tied directly to property valuations, Woo argues, the liquidity generated “does not flow into risk assets.”

This macro shift is now visible on Bitcoin’s long-term chart. Woo notes that price action resembles past mid-cycle slowdowns. The asset’s most recent candle shows a 7.6% decline.

The decline places Bitcoin below its recent peak but still higher relative to earlier cycles. Beneath the price chart, the MACD histogram indicates a decline in positive momentum.

Earlier green bars in 2025 indicated a transition from the negative momentum seen throughout 2022 and 2023. However, the newest bars have begun to weaken, mirroring the mid-cycle pauses recorded in 2017 and 2021.