Real Vision’s chief digital assets analyst Jamie Coutts believes Bitcoin (BTC) is gearing up for a massive breakout after weeks of volatility.
Coutts tells his 35,600 followers on the social media platform X that he thinks a weakening US dollar and a massive sell-off in the crypto markets sets Bitcoin up for a bullish reversal by May, when it may print new all-time highs.
According to the Real Vision analyst, the strength or weakness of the US dollar as measured by the US Dollar Index (DXY), a benchmark of the value of the US dollar compared to a basket of six major currencies, determines Bitcoin’s price direction.
When the DXY is strong, it is often seen as a sign that the US economy is strong and that the US dollar is a safe haven asset. This can lead to selling pressure in cryptocurrencies, as investors move their money into the US dollar.
“This week had it all. The DXY saw its fourth largest negative three-day move – massively liquidity-positive. Just as Bitcoin nuked and had its worst February in a decade. Meanwhile, in altcoin land, the Top 200 crypto index puked one more time. The chart shows that 365 days of new lows hit 47%, a hallmark of capitulation in a bull cycle. The stage is set for a new all-time high in Bitcoin and Top 200 aggregate market cap by May.”
He suggests that a bottom may now be forming in the altcoin market after the major selloff that could lead to some alts having explosive rallies to new all-time highs (ATHs).
“I expect some alts to make new ATHs this cycle.”
He also shares a chart showing that the three previous times the DXY fell by a similar percentage change Bitcoin went on explosive rallies.
“Don’t think people understand the significance of the DXY move in the past three days and what it means for Bitcoin.”
The DXY is currently at 104 while Bitcoin is trading for $88,787 at time of writing, down 1.2% in the last 24 hours.
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