A declining US dollar could trigger a strong crypto market rally in the second quarter of the year, according to Real Vision CEO Raoul Pal. His comments follow Bitcoin’s 4% surge over the past 24 hours as the greenback continues to slide.

“With the dollar, rates, and oil headed lower (all specific aims of [Treasury Secretary Scott] Bessent), financial conditions are now easing fast and lead risk assets by a couple of months,” Pal wrote in a 5 March 2025 post on X.

His remarks came a day after US Treasury Secretary Scott Bessent outlined his vision for lowering interest rates, a move that could further weaken the dollar.

Pal believes these conditions could set the stage for a strong Q2 for tech and crypto markets, with a potential positive carryover into the second half of 2025 if trends persist.

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Bitcoin’s Historic Q2 Performance

Historically, Bitcoin has performed well in the second quarter, averaging returns of 26.89% since 2013, according to CoinGlass data.

Pal emphasized that among the three major macroeconomic factors—interest rates, oil prices, and the U.S. dollar—the dollar’s trajectory is the most critical for the crypto market.

A weaker U.S. Dollar Index (DXY) typically pushes investors toward alternative assets like Bitcoin, gold, and equities. Since Feb. 5, the DXY has fallen 2.79%, dropping to 104.258, according to TradingView.

During the same period, Bitcoin has surged nearly 6%, reaching $91,860, as per CoinMarketCap data.

Crypto trading analysis platform Bitcoinsensus reinforced this sentiment in a March 5 X post, stating: “Historically, a bearish DXY means one thing: bullish Bitcoin long term if the drop continues in the coming weeks.”

The Dollar Index is collapsing for the last 24h, losing a major support level, value area high of the last 3 years, historically a bearish $DXY means one thing, bullish #Bitcoin long term if drop continues the next coming weeks pic.twitter.com/eowS7sPfhL

— Bitcoinsensus (@Bitcoinsensus) March 5, 2025

This pattern has played out before. During the COVID-19 pandemic, government stimulus and rate cuts led to a weaker dollar, driving Bitcoin from $5,000 in March 2020 to over $60,000 by April 2021.

Conversely, when Donald Trump was elected president in November 2024, the U.S. dollar surged to yearly highs, prompting analysts to warn that dollar strength is a headwind for Bitcoin.

At the time, Real Vision chief crypto analyst Jamie Coutts stated, “The macro backdrop has soured. Dollar strength is not good for Bitcoin.”

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Bitcoin Faces Resistance At $94K After Failed Breakout

Bitcoin may be in for a tougher climb toward $94,000 following a recent unsuccessful push to reclaim that price level, according to analysts at Bitfinex.

In a recent report, the exchange’s researchers noted that “any recovery” toward $94,000 could confront “significant resistance.” The warning comes after Bitcoin fell below the $94,000 threshold on 2 March 2025.  Since then, BTC has yet to mount a convincing rebound.

The next Federal Reserve decision on interest rates, set for March 19, is also expected to play a major role in shaping sentiment.

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