Reason to trust
Strict editorial policy that focuses on accuracy, relevance, and impartiality
Created by industry experts and meticulously reviewed
The highest standards in reporting and publishing
How Our News is Made
Strict editorial policy that focuses on accuracy, relevance, and impartiality
Ad discliamer
Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio.
This week, the US Dollar Index (DXY) has recorded one of its largest three-day negative performances in recent history. Since Monday, the DXY is down -5.4%, falling from 109.881 to 103.967—an event some market observers interpret as a bullish inflection point for Bitcoin. Jamie Coutts, Chief Crypto Analyst at Real Vision, has drawn on historical comparisons to argue that the steep DXY decline could portend a significant upswing in the world’s largest cryptocurrency by market capitalization.
DXY’s Historic Drop Signals A Major Bitcoin Rally
Coutts presented the findings of two historical backtests on X, detailing how similar DXY drops have coincided with pivotal moments in Bitcoin’s price cycles. He wrote: “When looking at this recent move in the DXY through a historical lens, it’s challenging to be anything but bullish. I ran a signal screen for 3-day negative moves of more than -2% & -2.5% and found they have all occurred at Bitcoin bear market troughs (inflection points) or mid-cycle bull markets (trend continuations).” Although the statistical significance is limited by Bitcoin’s relatively short trading history, Coutts underscored that these data points are nonetheless worth considering.
In his first backtest covering DXY declines of more than -2.5%, Coutts found such a scenario on eight occasions since 2013. Over a 90-day period following those declines, Bitcoin rose every single time, giving it a perfect 100% win rate. The average return was +37%, which would translate to an estimated BTC price of around $123,000, while a move of one standard deviation above that average reached +63% (approximately $146,000 BTC). Even in the worst instance, Bitcoin still managed to gain 14%, putting it around $102,000 BTC.
In his second backtest focusing on DXY declines of more than -2.0%, there were 18 such occurrences since 2013, and Bitcoin was up 17 out of those 18 times for a 94% win rate. The average 90-day return stood at +31.6%, close to $118,000 BTC, while a one standard deviation move was +57.8% (around $141,000 BTC). The worst 90-day return after such a DXY drop was -14.6% (approximately $76,500 BTC).
Acknowledging that these backtests cannot offer guarantees, Coutts stated, “I made a bold call yesterday about new highs by May. I try to base projections on robust data points. Ofc this time might be different. Let’s see.”
Analysts often view a declining DXY as a sign of improving risk appetite in global markets, which can favor alternative stores of value and risk assets, including Bitcoin and other cryptocurrencies. The US Dollar Index’s abrupt retreat comes on the heels of regulatory concerns and a challenging February for Bitcoin, yet Coutts maintains that the larger trend looks remarkably similar to historical points of resurgence.
He also noted in a post from the previous day: “Don’t think people understand the significance of the DXY move in the past 3 days and what it means for Bitcoin. […] The DXY saw its 4th largest negative 3-day move—massively liquidity-positive. Just as Bitcoin nuked and had its worst Feb in a decade. Meanwhile, in altcoin land, the Top 200 crypto index puked one more time. The chart shows that 365 days of New Lows hit 47%, a hallmark of capitulation in a bull cycle. The stage is set for a new all-time high in Bitcoin and Top 200 aggregate market cap by May.”
At press time, BTC traded at $88,404.
Featured image created with DALL.E, chart from TradingView.com
Jake Simmons, a dedicated crypto journalist, has been passionate about Bitcoin since 2016 when he first learned about it. Through his extensive work with NewsBTC.com and Bitcoinist.com, Jake has become a trusted voice in the crypto community, guiding newcomers and seasoned enthusiasts alike towards a deeper understanding of this dynamic field.
His mission is simple yet profound: to demystify Bitcoin and cryptocurrencies and make them accessible to everyone.
With a professional career in the Bitcoin and crypto scene that began right after graduating with a degree in Information Systems in 2017, Jake has immersed himself in the industry. Jake joined the NewsBTC Group in late 2022. His educational background provides him with the technical prowess and analytical skills necessary to dissect complex topics and present them in an understandable format. Whether you are a casual reader curious about Bitcoin or an investor seeking to navigate the latest market trends, Jake’s insights offer valuable perspectives that bridge the gap between complex technology and everyday usage.
Jake is not just a reporter on technological trends; he is a firm believer in the transformative potential of Bitcoin over traditional fiat currencies. To him, the current financial system is on the brink of chaos, propelled by unchecked government actions and flawed Keynesian economic policies. Drawing from the principles of the Austrian school of economics, Jake views Bitcoin not merely as a digital asset but as a crucial step towards rectifying a failing monetary system. His libertarian views reinforce his stance that just as the church was separated from the state, so too should money be freed from governmental control.
For Jake, Bitcoin represents more than just an investment; it’s a peaceful revolution. He envisions a future where Bitcoin fosters a sustainable and responsible financial framework for generations to come. His advocacy is not about opposition but about evolution, about laying the groundwork for a system that prioritizes transparency and equity over secrecy and inequality.
As a journalist, Jake’s articles are crafted with the precision of a scholar and the passion of a true believer. He provides not only news but also thoughtful analysis that connects the dots between daily developments and larger economic theories. His work is a beacon for those lost in the technical jargon often associated with crypto discussions, illuminating the practical implications and benefits of these technologies.
In summary, Jake Simmons is not just reporting on a revolution; he wants to be part of it, fully committed to enhancing public understanding and adoption of Bitcoin and cryptocurrencies. His work is more than just a collection of articles; it’s a resource, a guide, and a companion for anyone ready to explore the potential of this digital frontier. Whether you are taking your first steps into crypto or are a veteran looking to stay on top of the latest trends, Jake’s insights provide clarity and foresight in an often unpredictable industry. Join him on this journey to reshape the world of finance, one post at a time.
You can engage with his latest takes on Twitter: @realJakeSimmons.
Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
