Weak dollar, strong bitcoin. How macroeconomics affects the crypto market

Since the beginning of the year, the dollar index (DXY) has lost about 10%, leading to the largest deviation of the indicator from the 200-day moving average in the past 21 years.

As of July 9, DXY is at levels of a multi-year low around 97.6 points, with a temporary drop to 96.377 on July 1. Previously, the indicator was at this level in March 2022. The local multi-year peak was on January 15 at a level of 110.1 points, one week before Donald Trump's inauguration. At the current moment, the index has lost nearly 11.5%. The previous local peak is at a level of 114.8 points, recorded in September 2022.

Similar conclusions were reached by chief crypto analyst Jamie Coutts, who predicted bitcoin's rise to new highs by May against the backdrop of falling DXY.

At the time of his prediction, the price of bitcoin was around $90,000, and a new price peak was reached on May 22 at around $112,000. Coutts analyzed historical data from 2013 and identified correlations between DXY declines and bitcoin trends. He concluded that in 100% of cases, bitcoin rose when the dollar index fell by more than 2.5%.