Despite Bitcoin being approximately 24% below its all-time peak, its recent strength against the US Dollar Index (DXY) has seen a marked increase, coinciding with one of the dollar’s weakest weekly performances in years.
Analysis of Bitcoin’s price in relation to the DXY has led to the creation of a BTC/DXY indicator, a measure that evaluates Bitcoin’s performance independently of broader dollar fluctuations. This indicator has experienced a significant rise over the past week, demonstrating Bitcoin’s resilience in light of deteriorating dollar conditions.
The BTC/DXY ratio reached its peak between August and October 2024 before experiencing a prolonged decline that lasted until January 2025, hitting lows that hadn’t been seen since 2023.
An upward trend began in mid-January, and in the last week, there has been a notable surge, highlighting Bitcoin’s renewed strength independent of external factors.
The Head of Research at BlockTrends observed that the dollar is set to register its third-worst weekly decline since 2020, a downturn he expected following President Trump’s re-election.
Historically, significant dollar weakness has often been linked to a decline in Bitcoin, driven by a flow of capital away from riskier assets.
However, Bitcoin has remarkably remained stable amid the current dollar downturn. Since March began, Bitcoin has risen about 3% against the DXY basket.
With its trading range varying nearly 8-9% over the past year, the BTC/DXY indicator clearly showcases Bitcoin’s performance detached from general dollar trends, further emphasizing its recent upward progress as particularly notable amid DXY weakness.
Insights suggest that investors may increasingly view Bitcoin as somewhat insulated from conventional currency pressures, offering a clearer understanding of Bitcoin’s fundamental market standing.
The original content regarding Bitcoin’s relative strength in the face of dollar decline has been modified while retaining its core themes and information.