Major swings in the DXY usually indicate a directional shift to come in other assets and BTC is no different.
The dollar was moving down swiftly as BTC was making its epic 2017 run, but both started to move up sharp at the same time the last few weeks of that run which is rare when comparing DXY to BTC in its history. Both moving in the same direction on a larger timeframe usually indicates some momentum changes to come... We know what happened in 2018 to both stocks and BTC, BTC being hit the hardest and stocks on average basically ending the year flat.
So far, the 200 Day average has held up the DXY trend and you can see where it has touched the red average a few times in recent history to bounce up sharply... There's a lot of debate right now on the dollar and its direction. Some are bearish, some are bullish. My view has been that the dollar would come up to challenge the Macro down trend line stablished nearly 60 years and running which would take us into the 110-115 area. But, the recent FED news alludes to lowering of rates and at the very least a dovish tone.
I guess what matters most for DXY is what EURO does, but case in point, all of the fiat money cycles appear to be on guard and looking for reasons to inflate the currency... The massive deflationary debt overhang (created by the very system itself because in this system debt+interest = money) can only grow since debt on the Central Banks balance sheet is always larger than money supply due to interest (and negative rates don't solve this). So, they will look for reasons to inflate like crazy. Therefore, I think assets to money will continue the macro downtrend... but right now is what matters for BTC.
So, watch the 200 MA on DXY. IF it continues a hard bounce back towards 100 then expect BTC to eventually get tripped up by this move. A break of the 200 MA would just indicate a higher likelihood of continuation for mid term trend for BTC>
Its always possible that other things are at play too and the correlation weakens due to changes in the fiat basket DXY is compared too that mess with the trend. However, I remain more neutral on the matter and feel things will fade into a sudden reaction that leads to a big move one way or the other. So, I'm keeping an eye on how Dollar handles the 200 day for now.
The dollar was moving down swiftly as BTC was making its epic 2017 run, but both started to move up sharp at the same time the last few weeks of that run which is rare when comparing DXY to BTC in its history. Both moving in the same direction on a larger timeframe usually indicates some momentum changes to come... We know what happened in 2018 to both stocks and BTC, BTC being hit the hardest and stocks on average basically ending the year flat.
So far, the 200 Day average has held up the DXY trend and you can see where it has touched the red average a few times in recent history to bounce up sharply... There's a lot of debate right now on the dollar and its direction. Some are bearish, some are bullish. My view has been that the dollar would come up to challenge the Macro down trend line stablished nearly 60 years and running which would take us into the 110-115 area. But, the recent FED news alludes to lowering of rates and at the very least a dovish tone.
I guess what matters most for DXY is what EURO does, but case in point, all of the fiat money cycles appear to be on guard and looking for reasons to inflate the currency... The massive deflationary debt overhang (created by the very system itself because in this system debt+interest = money) can only grow since debt on the Central Banks balance sheet is always larger than money supply due to interest (and negative rates don't solve this). So, they will look for reasons to inflate like crazy. Therefore, I think assets to money will continue the macro downtrend... but right now is what matters for BTC.
So, watch the 200 MA on DXY. IF it continues a hard bounce back towards 100 then expect BTC to eventually get tripped up by this move. A break of the 200 MA would just indicate a higher likelihood of continuation for mid term trend for BTC>
Its always possible that other things are at play too and the correlation weakens due to changes in the fiat basket DXY is compared too that mess with the trend. However, I remain more neutral on the matter and feel things will fade into a sudden reaction that leads to a big move one way or the other. So, I'm keeping an eye on how Dollar handles the 200 day for now.
