Categories: Bitcoin Latest News

The Fourth Largest Weekly Drop in Dollar Index in Over a Decade Signals Bitcoin Bottom

The DXY Index, has experienced one of its sharpest one-week declines since 2013. The index measures the strength of the U.S. dollar against a basket of major currencies.

According to Bloomberg data from Global Macro Investor, the index’s one-week percentage drop has exceeded a negative four standard deviation move—a rare event that has only occurred three other times in bitcoin’s (BTC) history.

These previous occurrences include November 2022, when bitcoin hit its cycle low of $15,500 during the FTX collapse; March 2020, amid the covid 19 pandemic, when bitcoin briefly fell below $5,000; and the 2015 bear market, when bitcoin traded around $250. Each time the DXY Index suffered a drop larger than a -4 standard deviation, it coincided with a bitcoin bottom, followed by significant price gains.

Additionally, CoinDesk research highlights that the DXY Index is currently declining at a faster rate than in President Trump’s first term— a period that aligned with the 2017 bitcoin bull run. A decline in the DXY Index tends to be favourable for risk-assets, however a DXY index above 100, is still considered strong, currently at 103.8.

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