Real Vision analyst Jamie Coutts highlighted the significant relationship between the performance of the US dollar and the price trajectory of Bitcoin (BTC). Sharing his views with his followers on the social media platform X, Coutts clarified how movements in the US Dollar Index (DXY) significantly impact Bitcoin’s market behavior.
A 3% Drop Could Trigger a Bitcoin Rally
DXY is a metric that measures the value of the US dollar against a basket of six major global currencies. Currently, DXY is trading within a noticeable range, and its movements are closely monitored by market analysts and investors. Coutts stated that a drop in DXY could serve as a catalyst for a significant rally in Bitcoin.
According to Coutts, if DXY were to drop approximately three percent from its current level of 104.52, Bitcoin’s price could rise significantly. The Real Vision analyst suggested that a drop below the 101 level in DXY would be “rocket fuel for Bitcoin” and could potentially propel it to new heights, leading the largest cryptocurrency to rise by approximately 127% and reach around $150,000 in this cycle.
Coutts emphasized that risk assets, including Bitcoin, generally perform well when the US dollar weakens. For those unaware, the value of DXY reflects real-time market expectations regarding liquidity, and increased liquidity is favorable for risky assets like Bitcoin. According to Coutts, the key level to watch is the 101/102 range in DXY. A break below this level could signal a strong bullish phase for Bitcoin.
Warns of Negative Scenario
On the other hand, Coutts also warned of a negative scenario. If DXY strengthens and rises above the 106/107 range, it could negatively impact Bitcoin. Such an upward movement in DXY could lower the price of the largest cryptocurrency to levels last seen in February and potentially drop it to the $50,000 range.
At the time of writing, Bitcoin is trading at $66,189. Coutts’ analysis suggests that Bitcoin’s short-term future largely depends on the movements of DXY.
