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The Fourth Largest Weekly Drop in Dollar Index in Over a Decade Signals Bitcoin Bottom
One of the largest weekly DXY index drops since 2013 tends to align with bitcoin cycle lows.
Updated Mar 7, 2025, 2:10 p.m. Published Mar 7, 2025, 1:17 p.m.
What to know:
- Fourth occurrence of a -4 standard deviation drop in the DXY Index since 2013, a rare event historically linked to bitcoin bottoms.
- Previous instances in 2015, 2020, and 2022 led to significant bitcoin rebounds following the drop.
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 history.
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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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Bitcoin’s Deep Correction Sets Stage for December Rebound, Says K33 Research
K33 Research says market fear is outweighing fundamentals as bitcoin nears key levels. December could offer an entry point for bold investors.
What to know:
- K33 Research says bitcoin’s steep correction shows signs of bottoming, with December potentially marking a turning point.
- The firm has argued that the market is overreacting to long-term risks while ignoring near-term signals of strength, like low leverage and solid support levels.
- With likely policy shifts ahead and cautious positioning in futures, K33 sees more upside potential than risk of another major collapse.
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