Breaking: Bitcoin Price Prediction Hints at Explosive Gains! Why This 3% USD Drop Could Spark a Crypto Boom!

The crypto market faces a downturn due to global economic factors. However, analysts are watching the US dollar index (DXY) closely, as its recent shifts suggest Bitcoin might rebound. Historically, steep DXY drops have aligned with Bitcoin hitting a low, then surging upward. Experts believe Bitcoin could rally if this pattern continues. Some predict a potential price breakout toward record highs. Investors are now monitoring the DXY-Bitcoin correlation and looking for confirmation of this trend. 

Bitcoin Drops 10%: Economic Turmoil Shaking the Market

Due to mostly global economic concerns, Bitcoin and the crypto market as a whole have declined in the past weeks. First, the US Federal Reserve’s (Fed) interest rate cuts have been affecting the market negatively. Secondly, the tariffs and the global trade war have led to a massive decline in risk asset markets. Historically, the crypto market has been sensitive to global economic tensions and economic announcements like rate cuts or inflation metrics. As such, the BTC value fell 10% in two weeks. 

DXY Crashes Shaping Bitcoin’s Price

This week, the US dollar index (DXY) is showing one of the sharpest declines since 2013. Data points to November 2022 as the previous example of such a sharp fall in the US dollar index. This 2022 sharp decline was caused by the FTX disaster, which also pushed BTC to a bottom. However, Bitcoin’s price has been moving in the opposite direction from the DXY. As such, crypto investors are hoping that this development will cause a surge in risk assets like cryptocurrencies. 

Other than the 2022 crash, the DXY has also had two other instances of sharp falls. The first crash was in 2015 when the economic market was in decline, and BTC was trading for $250. Next was the crash that happened in 2020 amid the increased economic pressure from covid-19. In all three examples, the US dollar index experienced four standard deviations, and Bitcoin hit a bottom in its value.

DXY Drops 3%— Bitcoin Follows Historic Surge Pattern?

After creating a bottom, BTC always had a reversal in price movement and started a bullish price trend. For instance, in 2022, Bitcoin hit the bottom of $15,00 in its price before experiencing a trend reversal. Now, the US dollar index has fallen over 3% since March 3, going from 107 to 103. This 4-point decline is a possible signal to investors investors that a crypto rally must be on the way. There are also other connections between DXY and BTC that reaffirm this analysis.

Chart 1- Provided by Merlijn The Trader, published on Tradingview, March 8, 2025.

Based on Chart 1, Crypto analyst Merlijn The Trader has analyzed the DXY Bitcoin correlation. As per her analysis, whenever a bearish Moving Average Convergence Divergence (MACD) for DXY was recorded, BTC experienced a surge. Furthermore, Daan Crypto Trader, another crypto trader, has also reaffirmed this bullish view with his own Bitcoin price prediction. 

The Road to $120K: What Needs to Happen Next

Daan Crypto’s Bitcoin price prediction shows that if consolidation around range lows continues, a future all-time high of $120000 is possible. He further explained that we have seen this pattern in other consolidations in the current cycle. This pattern starts with BTC breaking even lower but stopping its fall, re-taking the range again, and moving higher. 

Will Bitcoin Rally? Key Indicators to Watch Now

Investors should watch Bitcoin’s consolidation and resistance. Holding critical supports at the current level could trigger a breakout. Caution remains essential as economic policy shifts and regulations still influence market sentiment. Investors navigating volatility should use diversified strategies and risk management while tracking macroeconomic signals. If the DXY keeps falling and interest rises, Bitcoin could enter a sustained bullish phase.