The US Dollar Index (DXY) is in the midst of a rally to the upside. As many crypto traders know, DXY has an inverse correlation to BTC and a rally from DXY can send Bitcoin (and crypto) down, or you can find Bitcoin rallying when DXY RSI is at its most oversold points.
Referencing the 4d chart, RSI is climbing to overbought territory for the first time since 2014. The last time we saw this pattern, it preceded a multi-year 25% rally for DXY that hasn't fully retraced yet.
Additionally the moving averages (20, 50, 100, 200 EMAs) are beginning to invert bullish. If this continues successfully will reflect growing strength and confidence in the US dollar.
Keep in mind I'm not terribly smart outside of crypto. I recognize the inverse correlation between DXY and BTC but I won't pretend to understand the full range of other geopolitical and economic factors that impact the US dollar, so perhaps this rally will be short lived.
Or another factor is the level of trust and adoption seen in crypto this cycle, with the emergency of products like Convex or Alchemix that can lock up your investment for year(s), plus the incredible level of OTC outflows this cycle, etc. This might all roll into a new narrative where the Bitcoin store of value and hedge against worsening inflation.
Referencing the 4d chart, RSI is climbing to overbought territory for the first time since 2014. The last time we saw this pattern, it preceded a multi-year 25% rally for DXY that hasn't fully retraced yet.
Additionally the moving averages (20, 50, 100, 200 EMAs) are beginning to invert bullish. If this continues successfully will reflect growing strength and confidence in the US dollar.
Keep in mind I'm not terribly smart outside of crypto. I recognize the inverse correlation between DXY and BTC but I won't pretend to understand the full range of other geopolitical and economic factors that impact the US dollar, so perhaps this rally will be short lived.
Or another factor is the level of trust and adoption seen in crypto this cycle, with the emergency of products like Convex or Alchemix that can lock up your investment for year(s), plus the incredible level of OTC outflows this cycle, etc. This might all roll into a new narrative where the Bitcoin store of value and hedge against worsening inflation.