Crypto analyst Jamie Coutts says that a breakdown in the US Dollar Index (DXY) could be hinting at coming rallies for Bitcoin (BTC).
In a new interview on the Less Noise More Signal YouTube Channel, Coutts shares a chart that shows the price of Bitcoin overlaid with large down moves – of at least 2.5% or more – in the DXY.
The DXY measures the strength of the USD against a basket of other major foreign currencies weighted by volume and often moves inversely to risk assets like Bitcoin.
According to Coutts, many of the large downward moves in DXY – like the one that happened in late March – have coincided with the beginning of BTC rallies.
“I’m just showing the Bitcoin chart and when these have occurred, which are the yellow icons. And so, on the eight occasions set, we’ve seen this play out 90 days later on all eight occasions – the Bitcoin [price] has been higher on average by about 30%, but anywhere by about 30% to 50% or 60%.
So if this was to play out and the lag between financial conditions and liquidity and asset prices plays out, then, really, we’re sort of looking at May as being a strong month for Bitcoin and potentially a retest of the all-time highs.”
At time of writing, Bitcoin is trading at $85,138, 21% below its all-time high.
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