This is the third post in the series of posts where I am looking at possible direction of BTC and price targets.
Links to previous posts are in description.
In this post we will look at DXY and use its price action to guess where BTC is headed in future.
The chart you see in the post shows a wave count based on Elliott Wave analysis.
The most recent count that I am tracking and makes sense is a Zig Zag correction in DXY after it put in a massive rally to 114.
The Zig Zag is a 5-3-5 sequence, downwards the most difficult part of this sequence is to identify the 3 (ABC) sequence.
Right now, we have completed the first two parts of the zigzag. The first 5 waves down followed by 3 wave sequence as a Flat correction and about to begin the final 5 waves down to 94 region on Dxy as we have satisfied the minimum requirement for the 3-wave sequence completion, which the 0.5 retracement from top to bottom. We just tapped it and are rejecting from 0.5 retracement.
Why does it matter for BTC price?
It's because DXY is highly inversely correlated with BTC price, so if DXY is about to go down bitcoin is likely to go up.
Another thing I noticed is the divergence in DXY/BTC correlation. DXY has put in an enormous 8% rally, from 13th July when it bottomed out and btc topped on the same date. But after 17th of august dump there has been a divergence, Dxy Put in an almost 5% rally and during the same time BTC put in 15% rally after hitting 25K support. This shows the increasing strength of Bitcoin
overtime, possibly because of increasing adoption among institutions.
I will be tying it all together in this series, in a final post which is coming soon.
So please follow me for updated on this analysis and may others to come in future.
Links to previous posts are in description.
In this post we will look at DXY and use its price action to guess where BTC is headed in future.
The chart you see in the post shows a wave count based on Elliott Wave analysis.
The most recent count that I am tracking and makes sense is a Zig Zag correction in DXY after it put in a massive rally to 114.
The Zig Zag is a 5-3-5 sequence, downwards the most difficult part of this sequence is to identify the 3 (ABC) sequence.
Right now, we have completed the first two parts of the zigzag. The first 5 waves down followed by 3 wave sequence as a Flat correction and about to begin the final 5 waves down to 94 region on Dxy as we have satisfied the minimum requirement for the 3-wave sequence completion, which the 0.5 retracement from top to bottom. We just tapped it and are rejecting from 0.5 retracement.
Why does it matter for BTC price?
It's because DXY is highly inversely correlated with BTC price, so if DXY is about to go down bitcoin is likely to go up.
Another thing I noticed is the divergence in DXY/BTC correlation. DXY has put in an enormous 8% rally, from 13th July when it bottomed out and btc topped on the same date. But after 17th of august dump there has been a divergence, Dxy Put in an almost 5% rally and during the same time BTC put in 15% rally after hitting 25K support. This shows the increasing strength of Bitcoin
overtime, possibly because of increasing adoption among institutions.
I will be tying it all together in this series, in a final post which is coming soon.
So please follow me for updated on this analysis and may others to come in future.
