BTC & the Dollar - 2010-2020 correlations
Aktualisiert
This analysis has most probably been done before, I haven't checked.
This is what I've found while charting the DXY (US Dollar index, shows the relative strenght of the dollar against a basket of other currencies).
Like many assets, Bitcoin has been doing great against a weak dollar, and it has been doing poorly against a strong dollar.
That's what you can see on the chart. Weak dollar = Bull market, Strong dollar, Bear market.
At first I thought this would only be true for the last BTC cycle, but it appears it has proven to be true for all of BTC's existence. I only checked on the BLX though, so this goes as far as 2010.
Can it help us predict the price of BTC in the next months ? Well, if you can read the DXY chart and predict the outcome, probably, but that's beyond my powers :)
Many market participants seem to believe the dollar is weakening & inflation is inevitable because of money printing. This could be true but that's a short sighted view in my opinion. Inflation depends on many other factors, not just money supply. Energy cost for example, and energy costs are low for now (remember the oil crash ?).
So my best guess for now is that the DXY could simply range here between 90 & 95. And according to the chart & correlation, the 2013 Bull run happened in a ranging DXY environment. So, even though we're close to support on the DXY and could see a bounce here next weeks, as long as we're staying within a tight range a bull market still looks possible to me.
You can refer to my previous articles (links below) for some info on the BTC cycles. I think the OBV analysis is the most relevant for now.
This is what I've found while charting the DXY (US Dollar index, shows the relative strenght of the dollar against a basket of other currencies).
Like many assets, Bitcoin has been doing great against a weak dollar, and it has been doing poorly against a strong dollar.
That's what you can see on the chart. Weak dollar = Bull market, Strong dollar, Bear market.
At first I thought this would only be true for the last BTC cycle, but it appears it has proven to be true for all of BTC's existence. I only checked on the BLX though, so this goes as far as 2010.
Can it help us predict the price of BTC in the next months ? Well, if you can read the DXY chart and predict the outcome, probably, but that's beyond my powers :)
Many market participants seem to believe the dollar is weakening & inflation is inevitable because of money printing. This could be true but that's a short sighted view in my opinion. Inflation depends on many other factors, not just money supply. Energy cost for example, and energy costs are low for now (remember the oil crash ?).
So my best guess for now is that the DXY could simply range here between 90 & 95. And according to the chart & correlation, the 2013 Bull run happened in a ranging DXY environment. So, even though we're close to support on the DXY and could see a bounce here next weeks, as long as we're staying within a tight range a bull market still looks possible to me.
You can refer to my previous articles (links below) for some info on the BTC cycles. I think the OBV analysis is the most relevant for now.
Anmerkung
Decided to add the recent chart following the breakout on DXY (down) and BTC (up).Anmerkung
An updte following recent developments.The FED still has ou backs and is not letting the markets dump.
This could be a reversal but for now it looks like continuation. Continuation until proven otherwise.
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