In this analysis I want to take a quick look at the relationship between BTC and DXY (USD index). Theoretically, when the general market outlook is bearish, investors will buy USD since it's the safest currency in the world. In other words, a bullish USD is generally not great for risky investments.
However, a bearish USD is generally great for risky investments like BTC and the like. Investors wish to spend their USD for assets which have better risk/reward ratios.
In the analysis above you can see what happened during the last two DXY bear markets. Both times they went hand-in-hand with a BTC bull-run. Be aware that the time-intervals will not exactly overlap due to the use of different time frames.
If we wish to see a $100k BTC this year, I'm quite certain we need a big fall in the dollar index. Keep an eye on the DXY, since a further drop might signal a more bullish crypto market.
Happy trading!
However, a bearish USD is generally great for risky investments like BTC and the like. Investors wish to spend their USD for assets which have better risk/reward ratios.
In the analysis above you can see what happened during the last two DXY bear markets. Both times they went hand-in-hand with a BTC bull-run. Be aware that the time-intervals will not exactly overlap due to the use of different time frames.
If we wish to see a $100k BTC this year, I'm quite certain we need a big fall in the dollar index. Keep an eye on the DXY, since a further drop might signal a more bullish crypto market.
Happy trading!
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