Bitcoin will rebound in May and the drop in the dollar index is the key, according to analyst

While the American dollar index (DXY) wobbles in its largest three -day drop in decades, Bitcoin (BTC) shines with hope, and about it the analyst Jamie Coutts predicts a historical takeoff for next May.

The DXY fell to a minimum of four months because the weak employment data strengthens the betting of interest rates. Besides, Tariff uncertainty looms over the dollarsince the temporary relief of President Donald Trump for Canada and Mexico fails to support the confidence of investors.

The markets were already positioned for feat cuts, but Friday’s data deepened concerns that The economy is slowing down faster than expected.

It is definitive that uncertainty about the United States commercial policy remains a key risk to the dollar. But in this gloomy panorama, some analysts see the bright light that Bitcoin emits.

One of them is Jamie Coutts, an analyst at the Royal Vision firm, who indicates that after a series of strong falls in the DXY, An important bithcoin turn could be unleashed and the cryptocurrency market in general.

In a thread of publications in X, Coutts presented a convincing argument, based on historical data, that the recent movements of the DXY could Promote Bitcoin to new historical maximums for next May.

Coutts stressed that this significant fall is “massively positive for liquidity” of Bitcoin. Then he said: “I don’t think people understand the importance of DXY movement in the last 3 days and what it means to Bitcoin.”

Subsequently, the analyst is based on historical retrospective to support his upward perspective. So he made two signal screens focused on DXY falls: one for three -day falls of more than 2% and another for falls above 2.5%.

For DXY falls of more than 2% (which occurred 18 times since 2013), Bitcoin has registered profits in 17 of the 18 instances during the next 90 days, with an average yield of 31.6%, which translates into a potential price of Bitcoin of $ 118,000.

In cases where DXY fell more than 2.5%, Bitcoin won 100%of the time, with an average yield of 37%.

Coutts said These falls historically coincide with the minimums of the Bitcoin bearish market Or the continuations of the mid -cycle market market, which suggests that the current market fall could be a “turning point” for a recovery.

The analyst’s confidence is reinforced by the broader context of the market. Bitcoin suffered its worst February in a decade, and the top 200 cryptocurrency index experienced an important liquidation, with new minimums of 365 days that reached 47%, A level that Coutts describes as a “distinctive seal of capitulation in a bullish cycle.”

However, Coutts warned that “this time it could be different,” recognizing the uncertainties inherent in financial markets.

Bitcoin shines in the shadow of the weak dollar

Another analyst, as James van Straten de Coindesk coincides with Coutts by pointing out that the fourth The largest weekly drop in the dollar index in more than a decade indicates that Bitcoin will play background. However, he observes that only three previous cases, in 2015, 2020 and 2022, which led to important Bitcoin rebounds after the fall of the DXY.

These previous events occurred in November 2022, when Bitcoin reached its minimum cycle of $ 15,500 during FTX collapse; March 2020, in the middle of the Covid-19 pandemic, when Bitcoin briefly fell below $ 5,000; and the 2015 bear market, when BTC was quoted around 250 dollars.

“Every time the DXY index suffered a fall greater than a standard deviation of -4, it coincided with a minimum of Bitcoin, followed by important price profits,” says Van Straten in his analysis.

The analyst adds that the DXY index is currently falling at a faster rate than in the first mandate of President Trump, a period that aligned with the 2017 Bitcoin upward trend. And, a fall in the DXY index tends to be favorable for risk assets, however, warns that a DXY index over 100, is still considered strong, and is currently in the order of 103.8.