As 2021 comes to an end, we can make a review of how the year went and attempt to project how 2022 might be like for Bitcoin. In this attempt, I've charted BTCUSD (orange trend-line) against the U.S. Dollar Index/ DXY (green trend-line) and the S&P500 (blue trend-line).
As you see, based on the correlations of those, BTC can be divided into phases of Bull (green), Bear (red) and Accumulation (yellow). Basically the whole 2021 was a year of accumulation as BTC traded generally sideways. At the same time the Dollar rose as well as the S&P. It can be argued that what kept BTC within accumulation and not a new Bear Cycle, was the strong rise of S&P throughout the year as typically a rising Dollar brings a Bear Cycle on BTC. Similarly, when the Dollar falls (or at least stays sideways) while the S&P rises, BTC enjoys a Bull Cycle. A sharp fall on the Dollar in particular is what brings BTC's parabolic rally.
So based on what this chart illustrates, we can argue that as long as S&P500 keeps rising or the Dollar stops rising, BTCUSD won't enter a new Bear Cycle. We may see an extension of this accumulation phase then if the theory of lengthening (mega) cycles is true. If the Dollar start falling though and attempts to reach the bottom levels of February 2018 and January 2021, we may see a new parabolic phase in 2022.
Keep an eye on these important correlations and don't lose sight of the bigger picture picture in 2022!
The TradingShot team wishes you a Happy New Year!!
Feel free to share your work and tell me your opinion on this analysis in the comments section below!
Thank you for your continued due diligence on this pair, for your insights and the education and perspective of each one. Happy MMXXII
bloodbound696
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There is two areas that diverge from each other important historical drops... I'm not buying it, but very interesting keep up the good work, I'm not slapping this with full blown coincidences, cause I mean anything can happen in the market, even now "some" people are like oh here we go again.. end of the year.. "Chinese New-Year" sell-off... some non-sense you get enough people to believe and hey will accumulate enough orders or money to fulfill it. For that same reason someone or some group or entity can "save the day" or.. give someone the "I told you so.." card and hang it over someone's head forever until proven other wise. Point is.. very cool, keep it up, not really accepting 100% this correlation concept for good technical reason if you look closely enough but I'm not dissing it good work. :)
Sobhan_23
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This picture is a university!
suvny21
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Happy new year! 🎉
MRKEP
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@santana2331, Head and Shoulder? Happy new year!
nginx
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The dollar is history. With inflation raging on and people's savings eroding in value very fast, people will finally wake up and realize the true value of BTC and the masses will pile in on BTC like there's no tomorrow. The wheels have been set in motion and there is no turning back the clock now. The effects of endless printing of dollar is finally showing and it's all downhill from here as far as fiat is concerned.