This Bitcoin Vs Dollar Comparison Says Crypto Winter Is Done
Bitcoin price is struggling to overcome the resistance between $28,000 and $30,000 per coin. However, BTC and the US Dollar appear to be following a similar pattern to the one they both followed in late 2020, which led to the latest bull run in cryptocurrencies.
Check out this can’t-miss DXY versus BTCUSD comparison and see why it might signal the official end of crypto winter.
Bitcoin price consolidates below resistance
Bitcoin price is currently trading below $28,000. Despite the lack of continued momentum in resistance, there was also a distinct lack of rejection.
In a market as volatile as cryptocurrency, prices rarely stay in a narrow range for long. And when they do, the volatility release is always worth the wait.
Due to the lack of a more prominent pullback, BTCUSD has always made higher highs and higher lows. Missing the current level would break this structure and a rounded support that has been building for years. Holding it, however, could produce a move similar to late 2020 when BTC dropped from $10,000 to $60,000 per coin.
The comparison below shows that just as BTCUSD struggled through the $12,000 resistance and ended up exploding just as it finally broke the key level, a decisive push beyond $30,000 per coin could do the same.
Will a similar divergence in the two assets form? | BTCUSD on TradingView.com
Why the DXY Dollar Index Says Crypto Winter Is Over
If price action holds at current levels, the rounded support structure will also start to take on a parabolic shape. In the past, Bitcoin has experienced parabolic rallies that lasted 12,000% or longer. The most recent parabolic climb lasted 1200% ROI.
In the above comparison, we can see that in 2020 the DXY broke below what would be the same rounded support that BTCUSD is now forming. Once again, the DXY is ready to penetrate the rounded bottom. When the top cryptocurrency by market capitalization held up and the dollar dipped further, all the ingredients were there for an incredible bull run.
The DXY is a trading index of the US Dollar against a weighted basket of other major currencies such as the Pound and Yen. While it has nothing to do with Bitcoin or crypto, it tells the market when the dollar is strong or weak. With the USD being half of the BTCUSD trading pair, the weak dollar is currently a boon for Bitcoin and cryptocurrencies.
If the DXY drops further, as the inverse correlation in the above comparison shows, Bitcoin could skyrocket to new all-time highs.
This feels like a repeat of 2020 minus a pandemic
DXY vs. #Bitcoin comparison pic.twitter.com/imSzY8aVrW
— Tony “The Bull” (@tonythebullBTC) May 8, 2023