Bitcoin has struggled with the bottom lower in recent weeks, leaving many investors wondering if the asset is on the verge of a major bear cycle. However, a rare data point linked to the strength of the US dollar (DXY) suggests that a significant change in market dynamics can be imminent. This Bitcoin purchase signal, which has only appeared three times in the history of the BTC, could indicate a bullish overthrow despite the current lower feeling.
For a more in -depth overview of this subject, see a recent YouTube video here:
Bitcoin: this had never happened 3x only before
BTC VS Dxy Reverse relationship
The action of Bitcoin prices has long been correlated with the Strength in American dollars (DXY). Historically, when the DXY is strengthening, the BTC tends to fight, while a decline often creates favorable macroeconomic conditions for the appreciation of bitcoin prices.
Despite this historically optimistic influence, Bitcoin price continued to withdraw, recently from $ 100,000 to $ 80,000. However, the past occurrences of this rare recovery ofx suggest that a delayed but significant BTC rebound could always be at stake.
Bitcoin Buy Signal Historic Occurities
Currently, the DXY has been down net, a decrease of more than 3.4% in a single week, a variation rate that has only been observed three times throughout Bitcoin trading history.
To understand the potential impact of this signal Dxy, let us examine the three previous cases when this sharp drop in the strength index of the US dollar occurred:
- Bottoir du Marché Post-Lee 2015
The first occurrence took place after the BTC price was the lowest in 2015. After a period of lateral consolidation, the BTC price experienced a significant increase in the increase, earning more than 200% in a few months.
The second instance occurred at the beginning of 2020, following the collapse of the net market launched by the COVID-19 pandemic. Similar to the case of 2015, BTC initially experienced a jerky price action before a quick rise trend, culminating in a rally of several months.
- 2022 Bear market recovery
The most recent body occurred at the end of the 2022 bear market. After a first period of price stabilization, BTC followed with a sustained recovery, climbing at considerably higher prices and launching the current bull cycle in the following months.
In each case, the sharp decline in Doxy was followed by a consolidation phase before BTC started in an important optimistic race. Superposition to the price action of these three instances on our current price action, we have an idea of the way things could take place in the near future.
Stock markets Correlation
Interestingly, this model is not limited to Bitcoin. A similar relationship can be observed in traditional markets, especially in Nasdaq and S&P 500.
The average yield of 30 days of all time for the NASDAQ following a drop in similar Doxy amounts to 4.29%, well above the standard yield of 30 days of 1.91%. By extending the window to 60 days, the average yield of the NASDAQ increases to almost 7%, which almost doubled the typical performance of 3.88%. This correlation suggests that Bitcoin’s performance following a Net covering aligns with broader historic market trends, strengthening the argument for a delayed but inevitable positive response.
Conclusion
The current drop in the US dollar strength index is a rare and historically bullish Bitcoin purchase signal. Although the Action of the immediate prices of the BTC remains low, the historical previous precedents suggest that a period of consolidation will probably be followed by a significant rally. Especially when reinforced by observing the same response in clues such as Nasdaq and S&P 500, the wider macroeconomic environment is favorably for BTC.
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Warning: This article is for information purposes only and should not be considered as financial advice. Always do your own research before making investment decisions.
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