Crypto News

Will Bitcoin catch up? BTC price was $40K when the dollar was this weak last time

Will Bitcoin catch up? BTC price was $40K when the dollar was this weak last time
© Copyright Image: Crypto Breaking News

Bitcoin (BTC) may see a “parabolic curve” begin thanks to U.S. dollar weakness as the greenback falls to three-month lows.

In a tweet on July 11, popular trader Moustache suggested that the time is right for BTC price history to repeat itself.

DXY “most important chart” for Bitcoin this year

Bitcoin’s formerly strong inverse correlation to dollar strength has waned this year, but its latest movements are a talking point among traders.

Data from Cointelegraph Markets Pro and TradingView shows the U.S. dollar index (DXY) on the way to testing support at 100 for the first time in months.

Previously above 105, the greenback has faced stiff resistance after last year’s twenty-year highs.

As a result of its newfound bearish behavior — which would cement itself further should the 100 mark be lost — Bitcoin stands to win, Moustache believes.

“Calm before the storm. Big Move is still loading,” he summarized alongside a chart showing DXY challenging the bottom of a Gaussian channel on weekly timeframes.

“First candle of the DXY (Dollar) now falls OUT of the channel. This is the point where you want to be positioned. In 2016-2017 and 2020-2021 this led to the parabolic curve in $BTC.”

U.S. dollar index (DXY) annotated chart. Source: Moustache/Twitter

The dollar’s cause has not been helped by markets keen to tap a potential reversal in U.S. interest rate hikes. With inflation abating, this looks ever more likely despite a Hawkish Federal Reserve.

The July 12 release of the Consumer Price Index (CPI) for the month prior came in below expectations, providing further fuel for risk assets.

Fellow trader Mikybull Crypto predicted that the downward DXY trend would continue, with BTC/USD hitting $35,000 as a result.

Continuing the historical comparison, meanwhile, popular trader Josh Olszewicz called DXY the “single most important chart” for Bitcoin into 2024.

“DXY showing technical weakness coupled with a programmatic supply reduction of Bitcoin issuance may lead to an outsized price reaction for Bitcoin post-halving. Similar DXY moves from 100 to 90 after the previous two halvings provided a tailwind for significant multi-month bullish rallies,” he wrote in a TradingView update.

“DXY is currently forming a high timeframe descending triangle, which holds a bearish bias. This chart pattern becomes invalidated with any higher high in the DXY at 103.50 but does not necessarily invalidate the possibility of a move to the historic range low of 90.”

U.S. dollar index (DXY) annotated chart. Source: Josh Olszewicz/TradingView

April levels return

Adding a broader perspective, William Clemente, co-founder of crypto analysis firm Reflexivity Research, presented the year-on-year change in DXY against how BTC/USD behaved through the years.

Related: Bitcoin exchanges now hold the same BTC supply share as in late 2017

Looking back, the last time that DXY traded at 100 was in mid-April 2022. At the time, Bitcoin hovered at around $40,000.

BTC/USD vs. U.S. dollar index (DXY) chart. Source: TradingView

Collect this article as an NFT to preserve this moment in history and show your support for independent journalism in the crypto space.

Magazine: Should you ‘orange pill’ children? The case for Bitcoin kids books

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Source: Cointelegraph.com

The post Will Bitcoin catch up? BTC price was $40K when the dollar was this weak last time appeared first on Crypto Breaking News.

Read more: https://www.cryptobreaking.com/will-bitcoin-catch-up-btc-price-was-40k-when-the-dollar-was-this-weak-last-time/

Text source: Crypto Breaking News

Disclaimer: Financial information and news are not financial advice, read the disclaimer.
Buy & sell Crypto in minutes

Join BINANCE!

The world's largest crypto exchange

You're just steps away from receiving your reward.

The most complete Crypto News Center.

Search Stories:

Latest top stories