Bitcoin poised for breakout as US dollar weakens

Real Vision’s chief digital assets analyst Jamie Coutts has expressed his belief that Bitcoin (BTC) is on the verge of a significant breakout following weeks of market volatility. Coutts shared his insights with his 35,600 followers on the social media platform X, suggesting that a weakening US dollar and a substantial sell-off in the crypto markets could set the stage for a bullish reversal by May, potentially leading to new all-time highs for Bitcoin.

Coutts emphasizes that the strength or weakness of the US dollar, as measured by the US Dollar Index (DXY), plays a crucial role in determining Bitcoin’s price direction. When the DXY is strong, it often indicates a robust US economy and positions the US dollar as a safe-haven asset. This can lead to selling pressure in cryptocurrencies as investors shift their funds into the US dollar. Conversely, a weakening DXY can create a favorable environment for Bitcoin and other cryptocurrencies.

Coutts noted that the recent three-day negative move in the DXY was one of the largest on record, which he believes is a liquidity-positive event for Bitcoin. Despite Bitcoin experiencing its worst February in a decade, the analyst sees this as a potential sign of capitulation in the bull cycle, setting the stage for a new all-time high in Bitcoin and the Top 200 aggregate market cap by May. He also suggests that a bottom may be forming in the altcoin market after the recent sell-off, which could lead to some altcoins experiencing explosive rallies to new all-time highs.

Coutts shared a chart illustrating that the three previous times the DXY fell by a similar percentage, Bitcoin went on explosive rallies. He underscored the significance of the recent DXY move and its implications for Bitcoin’s future price movements. The DXY is currently at 104, while Bitcoin is trading at $88,787, down 1.2% in the last 24 hours.