Dollar Index's Fourth-Biggest Weekly Drop in Decade Points to Possible Bitcoin Bottom
One of the biggest weekly drops in the DXY index since 2013 typically coincides with Bitcoin's cycle lows.
James Van Straten | Edited by Parikshit Mishra Updated Mar 7, 2025 14:10 UTC Published Mar 7, 2025 1:17 UTC
Key facts:
- The fourth time the DXY has declined by -4 standard deviations since 2013 is a rare event that has historically been associated with Bitcoin lows.
- Previous cases in 2015, 2020, and 2022 saw Bitcoin rally significantly after a crash.
The DXY index suffered one of its sharpest weekly declines since 2013. The index measures the strength of the U.S. dollar against a basket of other major currencies.
According to Bloomberg data from Global Macro Investor, the index's weekly percentage decline exceeded a negative value of four standard deviations – a rare event that has happened only three times in Bitcoin (BTC) history.
These previous events include November 2022, when Bitcoin hit its cycle low of $15,500 during the FTX crash; March 2020 during the COVID-19 pandemic, when Bitcoin briefly dipped below $5,000; and the 2015 bear market, when Bitcoin traded around $250. Each time the DXY index has shown a decline of more than -4 standard deviations, it has coincided with a Bitcoin low, followed by a significant price rally.
Moreover, CoinDesk research highlights that the DXY is currently declining at a faster pace than it did during Trump’s first term in office, a period that coincided with Bitcoin’s 2017 bull run. A decline in the DXY is typically favorable for risk assets, but a DXY above 100 is still considered strong, currently at 103.8.
