📊Bitcoin is rising while the dollar is falling and vice versa. Today I will use the simple examples to show the pattern that helps to identify the trend of Bitcoin for many years.
The instruments that we need: 🔶Bitcoin is the #1 cryptocurrency, the first and foremost crypto-asset, our favorite grandpa. Bitcoin's movement is copied by 99% of all crypto, it is the main indicator of the crypto market. 🔶DXY - U.S. Dollar Index. It was created in 1974 and shows the ratio of the US dollar to the basket of six other major currencies: euro, yena, pound sterling, Canadian dollar, Swedish krona and Swiss franc. The index essentially shows how strong the U.S. dollar is.
💡I've taken a few cycles as an example to make it easy to understand this principle. For the example, I don't take data up to 2017. At that time Bitcoin was with the small capitalization and a big HYPE. You're not interested in perfect examples, but in real experience and usage, aren't you?
So, the first cycle of 2017-2018 shows us that: 1. as soon as the index started to fall🐻, Bitcoin had an active bull run. 2. when the index hit lows it was almost Bitcoin's tops.
The second cycle of 2018-2020, Bitcoin spent in a huge consolidation and two corrections of -70%🐻 What was the index doing this time? Of course it was rising! Only after the last fall of Bitcoin in 2020, it was able to recover and continue its rise to the new ATH!
In the third cycle of 2020-2021 Bitcoin was able to grow to $63-67 thousand due to the unprecedented weakness of the dollar. Now Bitcoin is in consolidation and even the mass adoption and hype around crypto is not help BTC to renew ATH.
🏁The dollar was weakening amid huge inflation and Bitcoin was rising, but when the FED began raising the interest rate and investors began to transfer money from Europe to the United States, the index began a new bull run. You saw an example of what happens during an index bull run. Therefore, we should expect an active phase of Bitcoin growth at the moment when the FED rate hike ends (the end of August) and geopolitical issues will be solved😉
Friends, press the "like"👍 button, write comments and share with your friends - it will be the best THANK YOU.
P.S. Personally, I open an entry if the price shows it according to my strategy. Always do your analysis before making a trade.
The Fed rate hike cycle is only starting 50-75 bp alone in May and at least 50 bp in June..This rate hike cycle will not end in August, it will last until the end of 2023. The inverted yield curve recently is pointing to recession. Chinese growth is slowing and geopolitical risk shows no sign of easing. Fed officials are getting more and more aggressive... the Nasdaq is in a bear market and the S&P is heading for a major correction. If Russia cuts off gas supplies to the EU there will be a strong recession there, starting in Germany. I would be buying the US dollar and other haven assets. BTC is not a haven asset in a high rate environment.
werazor
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@john528walsh, Other than USD can you inform on other haven asset so that we might look at them
werazor
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A very informative piece, thank you sir.
nikanorovaka
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Thank you Yuriy! I'm beginner and this post is wery useful
kamranhz
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thanks alot yuri👏👏👏
Haloya67
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Cool
meetkapuriya
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thanks bro 💯💯👍👍
yumtee46
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Thanks alot.... it's a useful information
boundless_lord
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Nice post thanks, new indicator DXY I need to monitor & learn how to use!