The U.S. Dollar just posted one of its sharpest drops in months. What does this mean for Bitcoin and broader markets? Let’s break it down 🧵👇

1/ USD's Sharp Drop and BTC – Historical Patterns vs. Current Divergence Historically, Bitcoin ($BTC) and the U.S. Dollar Index ($DXY) have shown a weak, but often inverse correlation. The recent decline in $DXY, driven by trade war uncertainty, puts that relationship back in

2/ BTC During Dollar Drops – What the Data Shows Our scatter plot analysis looks at how $BTC reacted during past sharp $DXY drops (≥5% over 3 months). The results highlight historical patterns and place the current situation in context.

3/ BTC Tends to Rally During Sharp Dollar Drops During past instances of ≥5% declines in $DXY over 3 months: 🔸 $BTC historically posted positive returns 🔸 Average gain was +43% 🔸 The trend line remained above zero in most cases

4/ Negative Correlation: Deeper $DXY Drops, Softer BTC Performance Historically, larger $DXY declines were associated with more muted $BTC performance. This suggests an inverse relationship between the depth of dollar weakness and Bitcoin’s response.

5/ Historical Calm: BTC Performance After DXY’s Sharp Drop Following 3-month $DXY declines, $BTC’s average price change over the next 4 to 12 weeks was relatively flat (~+0.4%). Historically, these events did not lead to sustained momentum in either direction.

6/ Current Setup: April 2025 Deviation Amid Trade War In the current setup, $DXY is down ~9% over 3 months, second largest 3-month drop since 2011,driven by trade war uncertainty. Historically, a ~9% drop in $DXY has aligned with positive—but moderate—$BTC performance compared

7/ BTC Divergence: >15% Drop Despite Dollar Weakness But this time, $BTC is down over 15%—a clear deviation from the norm. This raises key questions: 🔸Does a trade war–driven $DXY drop impact crypto differently? 🔸Could BTC’s response simply be lagging? 🔸Or are we seeing a

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