Are there any historical highlights? Bitcoin holds the $ 62,000 level while the dollar index falls to a 3-week low

The US dollar index (DXY) could continue its decline in the fourth quarter on a classic technical setup known as the rising wedge. The bearish outlook for the dollar could push the price of Bitcoin (BTC) to new all-time highs as it remains above $ 62,000.

DXY is ready for another 1.75% decline

Rising wedges are bearish reversal patterns that start low down but contract as prices rise.. As a result, the trading range narrows, which makes the rally unconvincing. This usually causes the price to drop below the wedge support line and then drop to the maximum distance between the pattern’s trendlines.

The DXY has had a similar price structure since August. Additionally, the index’s decline this week caused it to break below the wedge support line, triggering a bearish deployment towards 92.416, about 1.75% below the breakout level (about 93.98).

DXY daily price chart with rising wedge setup. Source: TradingView
Are there any historical highlights?  Bitcoin holds the $ 62,000 level while the dollar index falls to a 3-week low
Are there any historical highlights? Bitcoin holds the $ 62,000 level while the dollar index falls to a 3-week low

DXY hit a year high of 94,563 a week ago, benefiting from fears of stagflation and the Federal Reserve’s decision in November to withdraw its $ 120 billion monthly bond purchase program. followed by rate hikes next year.

But the index fell to a three-week low on October 19thor this underscores that the money markets have ignored the Fed’s tapering decision. Instead, their focus has shifted to normalizing monetary policy, including the UK, where analysts are forecasting rate hikes of 35 basis points by the end of this year.

Bitcoin rallies on ETFs FOMO

Bitcoin’s price found support in the weakest dollar this week, in addition to optimism about the debut of the first exchange-traded fund (ETF) pegged to BTC futures on the New York Stock Exchange.

The BTC / USD pair has rebounded more than 40% so far this month, hitting a five-month high of $ 62,987 on October 19. A small correction occurred, but Bitcoin held the $ 62,000 level as temporary support against weakening dollar sentiment.

Daily price chart of the BTC / USD pair with an ascending channel pattern. Source: TradingView

Technically, Bitcoin hit the bullish exhaustion level of its predominant ascending channel area. Since the Relative Strength Index (RSI) is overbought over 70 in the daily timeframe as well, the cryptocurrency could go through a preliminary price correction with a short-term support target close to $ 60,000..

In the long term, however, several analysts expect the price of Bitcoin to reach $ 100,000.

Tom Lee, co-founder of Fundstrat Global Advisors, said in a statement dated Oct. 18 that ETFs based on bitcoin futures would collectively attract more than $ 50 billion in inflows in the first year, adding that BTC could potentially rise to $ 168,000 in response.

Noting that Bitcoin would become a six-figure asset by 2023, Jurrien Timmer, Director of Global Macro at Fidelity Investments, cited Metcalfe’s law, which measures the value of a network based on its growth rate.

“Other technological innovations, and even as a stock like Apple, it’s not that it’s a security analyst, it went through the same process where its sales multiplied by 38 in 10, 20 years, and its market value increased 900 times more, Timmer told Yahoo Finance, adding:

â € œSo it’s an exponential increase. And by those metrics, my models will read $ 100,000 by 2023. “

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every step of trading and investing involves risk and you should do your own research when making a decision.

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