We are retiring our dollar rule for bitcoin

Since June we have said that crypto cannot rally for long while the dollar is strong, meaning above its long-run average. On 2 October we said that if the Fed's figures still showed the dollar above that average on Monday, and bitcoin was still above $78,000 today, we would retire the rule.

Both things have happened. The dollar has been above its average at every reading since the middle of September. Bitcoin has not closed below the line we set on any day in those four weeks, and it is $82,267 this morning.

It is higher now than on the day the dollar crossed its average, despite a hot inflation report and Fed minutes that point to another rate rise. The rule said crypto would not rally in those conditions, and it did.

Before retiring it, we went back through our whole record to see how well the rule had ever worked. The strongest evidence for it was this summer: the dollar fell under its average at the end of July and stayed there until the middle of September, and bitcoin rose by nearly a fifth over those weeks. We pointed to that in August as the rule working. But that was one stretch, and our record has plenty of others.

Our record of the dollar against its average goes back to last September. We took every week since then and split them into two groups: weeks that started with the dollar above its average, and weeks that started with it below. Then we looked at what bitcoin did in each group. If the rule were right, bitcoin should have done worse in the strong-dollar weeks. It did better.