This week, the American dollar index (DXY) recorded one of the largest three -day negative results in the recent history. From Monday, DXY has fallen by -5.4%, drops from 109.881 to 103.967 -the destruction that some market observers interpret as a stubborn point of Bitcoin inflection. Jamie Coutts, the main cryptographic analyst at Real Vision, used historical comparisons to argue that a piercing drop in DXY may specify a significant raise in the world’s largest cryptocurrency by market capitalization.

The historic DXY drop signals a gigantic Bitcoin rally

Coutts presented Discoveries of two historical feedback tests on the subject of X, describing in detail how similar DXY drops coincided with key moments in Bitcoin price cycles. He wrote: “Looking at this recent movement in DXY through a historical lens, it is difficult to be stubborn. I ran a signal screen for 3 -day negative movements with a value of over -2% and -2.5% and found that they all took place in the Bitcoin Bear market (inflection points) or in the medium cycle (continuation of trends). “Although statistical significance is constrained by the relatively compact history of Bitcoin trade, Coutts emphasized that these data points are worth considering.

In his first test, covering DXY decreases by more than -2.5%, Coutts found such a scenario in eight since 2013. Within 90 days after these declines, Bitcoin got up every time, which gives excellent 100% winnings. The average return was +37%, which translated into an estimated BTC price of around USD 123,000, while the transfer of one standard deviation above this average reached +63% (about 146,000 USD BTC). Even in the worst case, Bitcoin still managed to gain 14%, which by putting around USD 102,000 BTC.

In his second test, focusing on DXY decreases by over 22.0%, from 2013 there were 18 such events, and Bitcoin increased by 17 out of these 18 times in the case of 94% of winnings. The average 90-day return was +31.6%, nearly $ 118,000 BTC, while one standard deviation movement was +57.8% (about 141,000 USD BTC). The worst 90 -day return after such a decrease in DXY was -14.6% (about 76,500 USD BTC).

Admitting that these reverse tests cannot offer warranty, Coutts said: “Yesterday I called new ups until May. I try to base projections on solid data points. Ofc may be different this time. Let’s see. “

Analysts often perceive the decreasing DXY as a sign of improving risk appetite on global markets, which can promote alternative stores of risk values ​​and assets, including bitcoins and other cryptocurrencies. The sudden retreat of the US dollar appears after regulatory fears and challenging February for Bitcoin, but Coutts maintains that a larger trend looks extremely similar to historical revival points.

He also noticed in a post from the previous day: “Do not think that people understand the importance of DXY in the last 3 days and what it means for Bitcoin. […] DXY has been observed the fourth largest, negative 3-day move-mass liquidity. Like Bitcoin, he touched and had the worst February for a decade. Meanwhile, in Altcoin Land, 200 of the best cryptocurrency indicators, knocked it again. The chart shows that 365 new low days reached 47%, which is a sign of surrender in the bull cycle. The stage is prepared for the new all -time in Bitcoin and the 200 best aggregated capitalization of the market until May. “

During the BTC press it traded at USD 88,404.

A distinguished painting created from Dall.e, chart from tradingview.com