Although Bitcoin is down around 24% from its all-time high, its recent strength relative to the US Dollar Index (DXY) has sharply increased, coinciding with one of the dollar’s weakest weekly performances in years, according to The Kobeissi Letter.
CryptoSlate analyzed Bitcoin price against the DXY chart to create a BTC/DXY indicator, a metric gauging Bitcoin’s performance independent of broader dollar movements. The indicator has surged over the past week, showing Bitcoin’s resilience amid weakening dollar conditions.
The BTC/DXY ratio peaked between August and October 2024 before a sustained downturn lasting until January 2025, where it hit lows not observed since 2023.
An uptrend started to form in mid-January, but over the past week, it has seen a pronounced uptick, emphasizing Bitcoin’s renewed independent strength.
Cauê Oliveira, Head of Research at BlockTrends, noted the dollar is poised to mark its third-worst weekly decline since 2020, a downturn he anticipated following President Trump’s re-election.
Historically, periods of notable dollar weakness often correlate with a subsequent decline for Bitcoin, driven by increased capital flow out of risk-oriented assets.
However, Bitcoin has held unusually firm amid the recent dollar dip. Since the start of March, Bitcoin has increased around 3% against the DXY basket.
With a trading range fluctuating nearly 8-9% over the past year, the BTC/DXY indicator illustrates Bitcoin’s performance distinct from general dollar trends, reinforcing its recent upward trajectory as particularly significant amid current DXY weakness.
Oliveira’s insights suggest investors may increasingly perceive Bitcoin as insulated from traditional currency pressures, providing a more transparent lens for evaluating Bitcoin’s fundamental market position.
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