The US dollar is starting to weaken again as sellers push the US dollar index (DXY) lower, which could boost Bitcoin (BTC) in the near future.
Alternative assets like Bitcoin and Gold are priced against the dollar. Therefore, when DXY starts to fall, it often causes BTC to rise against the dollar.
BTC / USD (orange) vs DXY (green). Source: Tradingview
The share of dollars in global reserves is declining rapidly
According to Holger Zschibbitz, a market analyst at Welt, the share of the US dollar in global reserves is rapidly declining as countries like Russia pursue a de-dollarization strategy and choose gold.
When a pandemic was declared in the first quarter of 2020, demand for the dollar increased as investors turned to liquidity as the world’s reserve currency.
However, due to various factors, including the presidential election and negative outlook for COVID over the past year, the dollar has struggled to outperform other currencies such as the Japanese yen and the Swiss franc.
“Girl’s face! The dollar is dropping. While the dollar’s share of global reserves initially increased at the start of the pandemic, it has decreased since then and is now only 59% -1.5 percentage points. Quarterly decline, the lowest level since 1995. From During active sales in US dollars. ”
If the US dollar continues to decline, Bitcoin will likely continue to appreciate in April.
Historically, April has been a strong month for Bitcoin for the past 10 years, and it has posted positive gains for five consecutive years since 2016.
Additionally, Bitcoin exchange CEO Danny Scott said the average bitcoin price was $ 83,000 in April. he wrote:
“According to the average of the law, the bitcoin # price in April is $ 83,000. The average price for 10 years in April is + 51%.”
Miners seem to be getting bitcoins
In addition to the favorable macroeconomic factors for Bitcoin, Lex Moskoviski, Head of Information at Moskoviski Capital, noted that miners have recently started increasing their BTC holdings.
In one day, miners added 4,380 bitcoin, which was described by the quantitative trader and investor as an uptrend. He said:
“Miners are already starting to build their sites. Today, a total of 4,494 # Bitcoins were piled up. Another 4,380 # Bitcoins were collected yesterday by miners. It really looks like a trend.”