Is The Dollar Index Making New 2021 Highs Dangerous For Bitcoin?
November 11 2021 - 5:36PM
NEWSBTC
The recent nerves in the stock market and macro world has caused
the dollar to surges to a new 2021 high, just as Bitcoin continues
to set new records. But is the greenback’s awakening a
dangerous situation for cryptocurrencies, or is something else
afoot? BTC Barely Reacts As DXY Taps New 2021 High Bitcoin price is
in price discovery mode, after breaking its former high set earlier
in the year. The cryptocurrency is pitched as a replacement for
gold, and even the dollar – the current global reserve
currency. Cryptocurrencies, commodities, and everything else
are priced in dollars as the most dominant currency acting as the
base conversion rate. This means that Bitcoin price increases
inversely to the dollar on the BTC/USD trading pair. Related
Reading | 10 Bullish Monthly Bitcoin Price Charts To Start November
So it is unusual that Bitcoin continues to tap new highs all while
the DXY Dollar Currency Index has reached the highest level of all
of 2021. The dollar currency index has reached a new 2021
high | Source: DXY on TradingView.com The Dollar Strength Keeps
Bitcoin Price At Bay The DXY is a weighted basket of forex
currencies trading against the US dollar (USD). That basket
includes major trade partners, the Euro (EUR), Japanese yen (JPY),
British pound sterling (GBP), Canadian dollar (CAD), Swiss franc
(CHF), and the Swedish krona (SEK). The highs in the DXY could be
indicative of weakness in the currencies in the basket, or strength
in the dollar itself. Bitcoin’s current performance or lack of
strong reaction after new highs, could more so be due to strength
in the dollar holding the cryptocurrency back. Not every
touch of this trend line has been pleasant. | Source: BTCUSD
on TradingView.com Both assets making yearly highs is highly
suspect, and could suggest a bigger reaction brewing in one or both
sides of the BTC/USD pair. Bitcoin price also happens to be
touching a trend line where such a reaction occurred in the
past. Related Reading | Want To Learn Technical Analysis?
Read The NewsBTC Trading Course An uptrend is defined as a series
of higher highs and higher lows – something characteristic of both
assets in the short term. What is very different between the two,
is the longer term trend. For Bitcoin, the primary trend has been
up while for the dollar has been down. One of these assets is
in an uptrend, the other is not | Source: BTCUSD on TradingView.com
After this short term move completes, each asset should resume its
previous trajectory, unless the trend is ready to change for a long
time to come. As bullish as I am on #Bitcoin, I can’t shake
seeing this trend line touch. It’s worth some caution. I’ve added a
Black Thursday fractal to convey the danger. If this happens, it
just means a later and higher peak for the cycle. I still aim for
sooner than later tho! pic.twitter.com/fPd7faDZb5 — Tony "The Bull"
Spilotro (@tonyspilotroBTC) November 11, 2021 Follow
@TonySpilotroBTC on Twitter or join the TonyTradesBTC Telegram
for exclusive daily market insights and technical analysis
education. Please note: Content is educational and should not
be considered investment advice. Featured image from
iStockPhoto, Charts from TradingView.com
TRON (COIN:TRXUSD)
Historical Stock Chart
From Mar 2024 to Apr 2024
TRON (COIN:TRXUSD)
Historical Stock Chart
From Apr 2023 to Apr 2024