Bitcoin’s correlation with the U.S. dollar has now reached all-time highs88 as Bitcoin continues its journey through unique macroeconomic conditions. Even with this unique anomaly, past data can provide valuable context on where the BTC price may be headed. Peterson is of the opinion that a dollar on the ropes would boost Bitcoin’s prospects tremendously. He notes similarities to that first part of the bull run seen in 2023. Peterson’s cryptography analysis shows the odds are high that Bitcoin will be hitting new highs in the months ahead.
Unprecedented Correlation and Potential Upside
Bitcoin’s correlation with the U.S. dollar is at an all-time high. As Timothy Peterson explains, this correlation, though not causal, makes clear the underlying conditions affecting both Bitcoin and the dollar.
This level of BTC-USD correlation is unprecedented. The relationship is not causal, but reflective of underlying conditions affecting both. - Timothy Peterson
Given that history, this relationship suggests that Bitcoin is going to do very well. This is so particularly true as U.S. dollar index (DXY) recently dropped considerably. On April 18, the DXY went under the important 100 level. This would only be the 39th such occurrence since 2010, based on monthly data. As it stands, the DXY is within spitting distance of its three-year lows. This makes it a fantastic time for Bitcoin to take advantage of the dollar’s vulnerability.
Bullish Predictions and Key Indicators
Timothy Peterson has provided some optimism to those looking for a rematch of January’s all-time highs. Peterson’s own proprietary tool, the Lowest Price Forward, shows a 95% chance of that being a $69,000 floor by March. In addition, his math indicates that BTC/USD might reach up to $138,000 within the next three months.
The first, and most important factor Peterson analyzes is the U.S. High Yield Index Effective Yield, which is now over 8%. This is a bullish signal for Bitcoin. U.S. trade tariffs play a major role in the recent U.S. dollar index (DXY) plummet, which continues to bolster this bullish outlook.
Navigating Macroeconomic Conditions
Bitcoin is on one of its most extreme macro journeys ever, with correlations to the U.S. dollar at all-time highs. Even with these unusual factors, historical trends can provide some hints as to what the BTC price action is likely to do in the future.
This likely puts Bitcoin between $75k and $138k within 90 days. - Timothy Peterson
Bitcoin has the opportunity to flourish as the dollar declines. Positive backward-looking information lends a bright spot to the cryptocurrency short-term outlook.
