Real Vision analyst Jamie Coutts offered an important perspective that the performance of the US dollar will affect the price of Bitcoin (BTC). According to Coutts, the US Dollar Index (DXY), which is used to measure the value of the US dollar against global currencies, is trading within a certain range. This is of critical importance, especially for investors who closely monitor Bitcoin’s price performance.
According to Coutts’ analysis, a decline of around three percent in DXY from current levels could have a positive impact on Bitcoin’s price. In particular, Coutts suggests that a drop in DXY below the 101 level could enable Bitcoin to experience a major recovery. At this point, he states that it may create a kind of “rocket fuel” effect for Bitcoin.
Currently, DXY is trading at 104.52. However, according to Coutts’ prediction, if DXY falls below a certain level, there could be a 127% increase in Bitcoin’s price. Coutts attributes this to the positive response of risk assets to the weakness in the US dollar. He notes that DXY instantly prices the market’s liquidity expectations and therefore represents the key to the Bitcoin cycle.
“Risk assets love dollar weakness. DXY holds the key to the Bitcoin cycle as it prices the market’s liquidity expectations in real time. And liquidity is coming. Watch the 101/102 level on DXY. “If this level is broken, we could see around $150,000 BTC this cycle.”
Therefore, Coutts’ evaluations emphasize that the dollar’s performance should be closely monitored for Bitcoin investors. The strength or weakness of the US dollar can significantly affect Bitcoin’s future price movements.
Earlier this month, Coutts warned of an upside scenario where an upward move in the US dollar index would send Bitcoin to levels last recorded in February.
“When the money supply actually expands again, if DXY turns bullish (i.e. weakens), then you have the macro/liquidity signal for BTC and that signal enters the race. However, 106/107 remains a scary level on DXY and if broken, Bitcoin will likely fall back to the low $50,000 range.”
Bitcoin is trading at $66,359 at the time of writing.
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