- Bitcoin‘s correlation with the US dollar has reached “unprecedented” levels in 2024, though economists predict this relationship will eventually reverse.
- Network economist Timothy Peterson projects Bitcoin could trade between $75,000 and $138,000 within 90 days, based on historical patterns during similar market conditions.
- Current macroeconomic factors including US trade wars are creating unusual market conditions affecting both Bitcoin and traditional assets.
Bitcoin is showing an unusual positive correlation with the US dollar as macroeconomic pressures mount from ongoing US trade tensions. Network economist Timothy Peterson predicts Bitcoin could reach between $75,000 and $138,000 within the next three months, according to analysis published on April 18.
Peterson’s research focuses on the US High Yield Index Effective Yield, currently exceeding 8%. He notes that similar conditions have occurred 38 times since 2010, and when they did, Bitcoin increased in value 71% of the time over the following three months. "The median gain was +31%. If it went lower, the worst loss was -16%," Peterson explained in his analysis.
To reach Peterson’s maximum projected value of $138,000, Bitcoin would need to gain approximately 62% within 90 days. The economist previously created the Lowest Price Forward tool, which in March gave 95% odds of Bitcoin maintaining a $69,000 floor price.
Unusual Dollar Correlation Expected to Reverse
The current positive correlation between Bitcoin and the US Dollar Index (DXY) represents a significant departure from historical patterns. Typically, these assets move in opposite directions, but Peterson suggests they’re now responding to identical macroeconomic pressures.
"This level of BTC-USD correlation is unprecedented. The relationship is not causal, but reflective of underlying conditions affecting both," Peterson shared on social media. "Historically inverse, the relationship flipped in 2024 as both assets began responding to the same macro stressors: tightening liquidity, high real rates, and global risk aversion. BTC will decouple and rise when real yields drop + liquidity returns."
Dollar Weakness Could Benefit Bitcoin
The US Dollar Index continues trading below the psychologically important 100 mark, reaching some of its lowest levels in three years according to data from Cointelegraph Markets Pro and TradingView.
Some analysts believe Bitcoin could directly benefit from this dollar weakness, potentially repeating a pattern seen during the early stages of the 2023 bull market. Peterson’s research suggests the positive correlation between Bitcoin and the dollar is temporary and will eventually revert to its historically inverse relationship.
Peterson emphasizes that Bitcoin will likely decouple from the dollar when real yields decrease and market liquidity improves, potentially driving the cryptocurrency to higher price levels within the next three months.
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