Back in October 2020 BTC broke above the DXY preceding a 500% run up. The simple dynamic at play was that a strong dollar detracts from risk assets whilst a weak dollar pumps risk assets.
This effect happens in two ways, firstly dollar demand dropping means asset demands are being purchased (its a zero sum game) and secondly as dollar demand (and price) fall risk assets raise in value by virtue of being measured against the falling dollar.
The dollar is certainly facing pressure. Despite interest rates sustaining at 525-550 by virtue of a strong jobs market, rate cuts are inevtitably coming in 2024 and FED chairman Powells comments on 60 minutes where he laid out the fact that US Debt dwarfs GDP.
Combine the DXY's bearish scenario with BTC seeing record breaking inflows from the ETF's (including now a flight from Chinese investors) and the upcoming halving (a literal halving of supply to market) and I think we can expect a significant BTC rally.
The only note of caution I would suggest would be around regulation. Its been a few weeks since the SEC tries to prosecute a big crypto player which is unusual for Gensler's tenure!
This effect happens in two ways, firstly dollar demand dropping means asset demands are being purchased (its a zero sum game) and secondly as dollar demand (and price) fall risk assets raise in value by virtue of being measured against the falling dollar.
The dollar is certainly facing pressure. Despite interest rates sustaining at 525-550 by virtue of a strong jobs market, rate cuts are inevtitably coming in 2024 and FED chairman Powells comments on 60 minutes where he laid out the fact that US Debt dwarfs GDP.
Combine the DXY's bearish scenario with BTC seeing record breaking inflows from the ETF's (including now a flight from Chinese investors) and the upcoming halving (a literal halving of supply to market) and I think we can expect a significant BTC rally.
The only note of caution I would suggest would be around regulation. Its been a few weeks since the SEC tries to prosecute a big crypto player which is unusual for Gensler's tenure!