DXY Regime & Bitcoin Cycle Indicator

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DXY Regime & Bitcoin Cycle Indicator

This indicator measures the current U.S. Dollar (DXY) trend regime and its historical relationship with Bitcoin performance.

Core Idea
Bitcoin has spent most of its existence inside a long-term dollar bull market. Historically, Bitcoin’s strongest returns have occurred during periods of dollar weakness. This tool identifies whether the dollar is currently in a Falling or Rising regime using a simple but effective method.
Methodology

Uses monthly DXY data
  • Calculates a 4-month Simple Moving Average of DXY
  • Measures the 2-month Rate of Change of that SMA (called Dollar Trend Velocity)
  • Negative velocity = Falling Dollar Regime (historically more favorable for Bitcoin)
  • Positive velocity = Rising Dollar Regime (historically less favorable for Bitcoin)


What the Indicator Shows
  • Background coloring: Teal = Falling regime | Red = Rising regime
  • Histogram: Dollar Trend Velocity
  • Table (top right):
  • Velocity
  • Regime (Falling / Rising)
  • Streak (consecutive months in current regime)
  • Strength (Mild / Moderate / Strong)
  • Bias (BTC bullish / BTC weak)



How to Use
This is a macro regime filter, not a short-term timing tool.
It helps assess the broader dollar backdrop when making Bitcoin allocation or risk decisions. A Falling Dollar regime has historically provided a stronger tailwind for Bitcoin, while a Rising Dollar regime has often acted as a headwind.

Disclaimer: This script is for educational and research purposes only. It does not constitute financial advice.

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