PLEASE NOTE: So just to put it out there, i am by no means an expert / master of T.A. This is strictly for educational purposes and would love to hear your insights, tips, advice and more. Best ways to learn is through expressing what you've learned so far and engaging with others.
So lets jump in
As we know today CPI data dropped and it was good news. Many are speculating Inflation could have peaked and we could be seeing the start of risk on across markets including BTC
But lets strictly analyze the facts in the charts of the DXY, the $ which at times can be a great chart to determine what the trend could be, whether risk on (bullish) where the dollar drops or risk off (bearish) when the dollar raises. As dollar is a safe heaven during bearish markets and uncertain times like we saw and are seeing.
Okay so now just seeing things in my TA lens only. Please note this is in the Monthly timeframe so we are looking at the bigger picture.
We are currently at new highs since a long time. As marked by the Red Bar Zone labeled MAX Resistance. We've only been here for brief moments in the dollars history. Majority of price action happens below this.
So what this chart is trying to show is that there is a BEARISH DIVERGENCE playing out. This is when: 1. PRICE action creates HIGHER HIGHS 2. INDACTORS show LOWER HIGHS
AND as you can see its noticeable in 3 of my favorite indicators: RSI which helps determine oversold/overbought periods and ADX and DI / MACD which have to do with momentum
So with that, it normally means a trend reversal is coming and currently with todays CPI print and how markets were reacting its possible we could be going into a period of RISK ON, for how long im not sure. Can we go higher in DXY after a bull back, maybe. Could that mean Lower lows across markets including BTC could be. Hard to know exactly. But its a ripe time to trade for sure!
So i roughly put a guess on where DXY can go in my opinion with FIB retrace. The upper orange thin trend line could also potentially be a retrace area.
Anyone thats what i got. Let me know what you think down below. Please like my analysis if you got even a little out of it. Please do give your insights as well. Lets get these markets together! THANKS be safe and manage your risk / use stop losses! BELOW check my update on BTC, which i currently in a trade.
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Price went above my target red box and retraced down a bit following my prediction. BUT DXY bounced off the .618 fib. We shall see if this coninues.....
Add on: Please note - Let me correct the text in the RSI area, the important take away is that its been above the Moving Average or yellow line for some time, and its over bought-ish. Its been above for 15months ish and its touched above 80 level so its possibly it comes down to meet the yellow line which would hypothesis a drop in price, and further drop if it goes below the line. As noticed when you look to the history. But also note the yellow line will move up too as long as price stays around these current levels.