Bitcoin has faced challenges staying above $90,000 since dropping below $95,000 on February 24, experiencing significant price fluctuations recently. Its realized volatility hit its highest level since Q3 2024. Analysts are closely watching the US dollar’s decline, with some suggesting it could lead to new Bitcoin highs. James Coutts, a crypto analyst, highlighted that when the US dollar drops significantly, Bitcoin tends to rise, offering potential price targets ranging from $102,000 to $143,000. Optimism persists as over 50,000 new wallets entered the Bitcoin network last month, reflecting investor confidence. Technical assessments indicate that Bitcoin may aim for $140,000 if it can reclaim the $91,200 mark, hinting at potential upward trends.
Bitcoin is currently facing challenges as it tries to maintain a trading price above $90,000 after dropping below $95,000 on February 24. Over the past week, the cryptocurrency has experienced significant price volatility, with its realized volatility reportedly peaking at levels not seen since the third quarter of 2024, according to data from Glassnode.
As the Market prepares for the inaugural U.S. crypto summit at the White House, analysts are examining how the recent decline of the U.S. dollar could impact Bitcoin’s future price movement. James Coutts, the chief crypto analyst at Real Vision, shared insights on the correlation between the falling U.S. Dollar Index (DXY) and Bitcoin’s performance. He pointed out that the DXY had witnessed its fourth-largest decline in a three-day stretch, suggesting that such a drop could lead to new highs for Bitcoin.
Coutts analyzed past data and found that when the DXY decreased by 2.5% or more, Bitcoin has always risen, with predictions indicating that it could reach prices between $102,000 and $143,000 based on various scenarios. He noted that the DXY fell by about 3% from March 3 to March 6, and he made a strong prediction that Bitcoin could hit new all-time highs by May 2025.
Additionally, macro research head at Global Macro Investor, Julien Bittel, echoed Coutts’s sentiments, stating that easing financial conditions suggest an upward trend for riskier assets like Bitcoin.
Despite the recent downturn, data from Santiment revealed that over 50,000 new wallets had been created on the Bitcoin network, signaling optimism among investors. This includes wallets holding less than 0.1 Bitcoin and several whale wallets containing significant amounts of BTC.
From a technical perspective, Bitcoin’s bullish potential is reinforced by an analyst’s observation that it’s poised to reclaim $91,200. If successful, this could set the stage for a significant price target of $140,000.
Investors are watching the Market closely as these developments unfold, knowing that Bitcoin’s correlation with the U.S. dollar could provide critical insights into its future performance.
Tags: Bitcoin price, cryptocurrency trends, US dollar, Market analysis, Bitcoin volatility.
What is the connection between Bitcoin price highs and the US Dollar Index?
Analysts have noticed that when the US Dollar Index goes down, Bitcoin often hits new price highs. This happens because as the dollar gets weaker, people look for other places to invest, like Bitcoin.
Why does a weaker US Dollar help Bitcoin rise?
A weaker US Dollar means that people can buy less with their money. This leads investors to seek alternatives like Bitcoin, which they see as a store of value. Because of this increased demand, Bitcoin price can go up.
Have there been historical examples of this trend?
Yes, there have been significant examples in history. During times when the US Dollar Index fell, Bitcoin reached its all-time highs, especially in 2017 and 2020. These moments showed how the two are closely linked.
Is this trend expected to continue?
Many analysts believe that this trend can continue. If the US Dollar struggles, more investors may turn to Bitcoin. This could lead to new price highs, although Market conditions can change quickly.
Should I consider this trend when investing in Bitcoin?
Yes, understanding the relationship between Bitcoin and the US Dollar Index can be helpful. However, always do your research and consider multiple factors before making investment decisions.
