I like to imagine Satoshi Nagamoto looking at this chart every day, framed in his living room right next to Bitcoin’s whitepaper. This chart portrays his main success (excluding Bitcoin’s ‘mere’ price appreciation over the last decade).
The blue line represents the Dollar index, while the orange one Bitcoin’s price. Clearly, these two assets are well correlated, with Bitcoin’s strength reflecting every cycle of weakness in the Dollar market.
The previous two downtrend cycles of the Dollar supported Bitcoin’s parabolic bull runs. You may like it or not, but Bitcoin is now a global asset. You might want to claim it as a coincidence, but this is unlikely at this stage.
Global investors have gradually come to accept its value as a form of protection from the risk of inflation. Historically, these cycles lasted around one year each, and that fact may suggest that Bitcoin’s upside is limited.
In 2018, the FED was in a very different spot than today. The economy was solid, and they had more options in terms of monetary policy. Nowadays, the world is still fighting the Coronavirus outbreaks, and economic indicators still flash signs of slow business activity. It isn’t easy to imagine much room for new tightening policies that could strengthen the Dollar at this point.
If you’re looking for a price target for Bitcoin, you better brush up on your macroeconomics - it could end up surprising us all.
The blue line represents the Dollar index, while the orange one Bitcoin’s price. Clearly, these two assets are well correlated, with Bitcoin’s strength reflecting every cycle of weakness in the Dollar market.
The previous two downtrend cycles of the Dollar supported Bitcoin’s parabolic bull runs. You may like it or not, but Bitcoin is now a global asset. You might want to claim it as a coincidence, but this is unlikely at this stage.
Global investors have gradually come to accept its value as a form of protection from the risk of inflation. Historically, these cycles lasted around one year each, and that fact may suggest that Bitcoin’s upside is limited.
In 2018, the FED was in a very different spot than today. The economy was solid, and they had more options in terms of monetary policy. Nowadays, the world is still fighting the Coronavirus outbreaks, and economic indicators still flash signs of slow business activity. It isn’t easy to imagine much room for new tightening policies that could strengthen the Dollar at this point.
If you’re looking for a price target for Bitcoin, you better brush up on your macroeconomics - it could end up surprising us all.