According to Chief Crypto analyst Jamie Cott in Real Vision, a sharp decline in the US dollar index may set a platform for the bitcoin price rally.
In a March 7 post on X, Kotts cited historical evidence that often indicates a significant decline in DXY with large uptrades in bitcoin (BTC). He operated a backtest on cases with DXY dropped more than 2% and revealed that bitcoin had an average of 31.6% and 94% winning rates in the next 90 days.
In addition, Bitcoin posted 100% profit of time, average 37% returns, when DXY fell more than 2.5 percent. Coutts believe that a new all-time will reach a high level by May based on these trends.
DXY is often considered an inverted sign for risky assets such as bitcoin as it measures the value of the US dollar against a basket of major currencies. Investors often turn to alternative stores of price like bitcoin when the dollar is weakened.
The DXY recently coincides with the disturbance of the market, which has been fuel by Trump’s tariff on Canada and Mexico, along with a national crypto strategic reserve and clear rules have been pushed renewed to their administration for strategic reserve and clear rules. At the same time, the upcoming Crypto summit has promoted speculation in the industry.
Recently after market disturbance, Bitcoin has been trading around $ 87,800, which is 4% below the press in the last 24 hours. But the projection of altcoins remains mixed. Although there has been some recovery in solid projects, the market is still suffering from heavy sales as a whole.
According to coutts, the new 365-day climbing in the top 200 Crypto index reached 47%, a sign of capitulation is usually seen before rapid reversal. If historical trends hold, a decreasing dollar and increasing institutional confidence can be run by bitcoin and altcoins during a period of continuous profit.
Given the uncertainty around the next functions of the Federal Reserve, the macroeconomic issues may have even greater impact on the market direction in the short term.
