Bitcoin Bottom in Sight as Dollar Index Suffers Its Fourth-Largest Weekly Drop in 10+ Years

Steep Dollar Index Drop Marks Rare Event, Historically Signals Bitcoin Bottom

The U.S. Dollar Index (DXY) has logged one of its most significant weekly declines since 2013, a move that has historically aligned with major bitcoin (BTC) cycle lows.

According to Bloomberg data from Global Macro Investor, the recent one-week drop in the DXY exceeded a negative four standard deviation move—an event that has only occurred three times in bitcoin’s history. Each of these instances marked a pivotal moment for BTC:

• November 2022 – Bitcoin bottomed at $15,500 following the FTX collapse.
• March 2020 – BTC briefly plunged below $5,000 amid pandemic-driven market turmoil.
• 2015 Bear Market – Bitcoin traded near $250 before beginning a long-term recovery.

In each case, bitcoin rebounded significantly in the months following the extreme dollar weakness.

DXY Trends and Bitcoin’s Potential Upside

CoinDesk research also notes that the current pace of decline in the DXY is outpacing its movement during Trump’s first term, a period that coincided with the 2017 crypto bull market. Historically, a weaker dollar has provided a favorable backdrop for risk assets, including bitcoin.

While the DXY remains above 100—currently sitting at 103.8—further declines could reinforce bullish momentum in the crypto market, potentially setting the stage for bitcoin’s next major rally.