Bitcoin’s Price Linked to Declining US Dollar Index: Expert Insights
Bitcoin’s struggles amidst USD declines could signal new highs, according to analysts. James Coutts’ analysis indicates a strong correlation between DXY drops and Bitcoin’s performance, with predictions for significant price increases. Investor activity remains robust despite recent price fluctuations, suggesting optimism.
Bitcoin has encountered significant challenges in maintaining a price above $90,000, particularly after a drop below $95,000 on February 24, 2023. Recent fluctuations have led to Bitcoin’s realized volatility reaching its peak since the third quarter of 2024, as reported by Glassnode. As investors brace for potential price volatility at the forthcoming US crypto summit at the White House, attention has turned to the diminishing value of the US Dollar Index (DXY) and its possible implications for Bitcoin.
James Coutts, Chief Crypto Analyst at Real Vision, conducted a comprehensive analysis linking the DXY’s decline and Bitcoin’s historical performance. The DXY recently experienced a significant four-day drop of between -2% and -2.5%, which Coutts suggested could encourage Bitcoin to reach new heights. His historical data, assessing trends since 2013, reveals that when the DXY falls by 2.5% or more, Bitcoin’s price escalates 100% of the time.
For Bitcoin’s performance projections based on the DXY decrease of 2.5%, the best-case scenario suggests a potential increase of 65%, targeting a price of $143,000. The average case forecasts a 37% rise, positioning Bitcoin at $123,000, while the worst-case prediction indicates a modest gain of 14%, leading to a price of $102,000. Conversely, a 2% drop in the DXY has historically resulted in a 94% success rate of Bitcoin appreciation, rising 17 out of 18 times over 90 days.
Recent DXY decreases from March 3 to March 6 totaling 3% have prompted Coutts to assert that new all-time highs may be achievable by May 2025. Additionally, Julien Bittel, Macro Research Head at Global Macro Investor, corroborated the upward trend opportunity for Bitcoin based on the DXY’s downward trajectory.
The data analytics platform Santiment reported an increase of over 50,000 wallets within the network over the last month, indicating continued investor optimism despite recent downturns. The recorded statistics highlight that 37,390 new wallets possess less than 0.1 BTC, 12,754 contain between 0.1 to 100 BTC, and six whale wallets hold at least 100 BTC each. In terms of technical analysis, investor Jelle emphasized that Bitcoin’s “Power of Three” setup is still in place, suggesting promising future trends.
This article does not provide investment advice and underscores the importance of conducting personal research before making any trading decisions.
In summary, Bitcoin’s price trends appear to be historically linked to fluctuations in the US Dollar Index. Analysts predict potential new all-time highs as the DXY plummets, with Coutts and Bittel highlighting the correlation between DXY’s declines and Bitcoin’s price increases. Furthermore, a notable rise in wallet activity suggests investor optimism. It remains essential for individuals to perform due diligence before investing.
Original Source: www.tradingview.com
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