US Dollar / Bitcoin Ratio (Bitcoin)

The US Dollar Index, divided by Bitcoin's price.

Predictive Strength

Negligible

Bitcoin historically had ▶ 5.18% 30 days returns when US Dollar / Bitcoin Ratio was ▆ Moderate (0.4 - 0.6). It indicates average expected returns.

Unravel

unravel

BTC Price with US Dollar / Bitcoin Ratio

US Dollar / Bitcoin Ratio Predictive Strength Analysis

Unravel

unravel

Unravel

unravel

▆ Very Low▆ Low▆ Moderate▆ High▆ Very High

Get Access

Our Methodology

Predictive Strength

Negligible

Get Access

The US Dollar Index, divided by Bitcoin's price.

Potential Edge

Macro Sentiment Amplification

The DXY/BTC ratio distills two competing narratives:

Dollar strength = risk aversion, tighter liquidity, and Fed policy dominance.
BTC strength = risk-on appetite and speculative capital flows.
Divergences in this ratio (e.g., BTC rising despite dollar strength) signal shifts in market psychology, often preceding trend reversals.

Bitcoin’s has a dominant liquidity-sensitive asset role, attracting capital when dollar weakness signals easier financial conditions.

Data Collection Methodology

The ratio is calculated by dividing the US Dollar Index (DXY)—a weighted geometric mean of USD against six currencies—by Bitcoin's price, which aggregates data from major exchanges like Bitstamp, Coinbase, Bitfinex, and Kraken. The result is normalized to historical values (e.g., using a divisor for continuity), creating a relative measure of USD strength versus Bitcoin.

Backtest (Strategy Performance) - Strategy

Strategy Yearly Returns (CAGR)

100.00%

Sharpe Ratio

1.00

Max Drawdown

100.00%

Beta

1.00

Volatility

41.04%

To understand a predictive factors predictive power, we create a simple long/short strategy and simulate its past performance (with daily rebalancing):

Long when the predictive factor is above 0, with a position size equivalent to the predictive factor value.
Short when the predictive factor is below 0, with a position size equivalent to the predictive factor value.

The strategy is rebalanced daily, on a continuous basis. There are 0.5% transaction costs applied on each position adjustment.

Get Access