Jamie Coutts, who specializes in the cryptocurrencies market, explained that a certain indicator used to predict Bitcoin price movements gives potentially positive signals.
According to Coutts, this indicator is the dollar index (DXY), which measures the dollar’s strength against other major foreign currencies. DXY is a reference point used to track the performance of the dollar in foreign exchange markets and represents a weighted basket of six different major currencies. DXY generally has an inverse relationship with risky assets; It rises when risky assets are sold, and falls when risk appetite increases. According to Coutts, Bitcoin rallies usually occur during the summer months (June through September), and one of the driving forces behind these rallies is the weakening dollar index.
Coutts to their statements While it is observed that Bitcoin rallies occur every summer, the weakening of the dollar index during these periods affects the price of Bitcoin upwards. “If there was one indicator to test this theory, it would definitely be the dollar,” Coutts said. Each BTC summer rally is associated with Bitcoin rising rapidly following a stronger dollar peaking and then falling in value.
Stating that DXY is in the middle of a long consolidation range, Coutts states that a break below the 101 level could start a major rise for Bitcoin. This could be an important indicator for investors.
“Currently, DXY is stuck in a narrow consolidation range. A break above the 107-108 level will put serious pressure on all risky assets.
NEWS CONTINUES BELOW“A break below 101 would create a move into the low 90s, and if that happens, it would likely push BTC to $150,000 based on previous DXY moves.”
At the time of writing, Bitcoin is trading at $67,702.
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