Bitcoin price is approaching $ 50,000 as the dollar declines after hitting its one-year high

Bitcoin’s price (BTC) seeks to regain the $ 45,000 level on October 1st as the US dollar declines after hitting its year-long high. Bitcoin’s close inverse correlation with the dollar over the past month suggests this a weakening of the dollar could push the price of BTC even higher in the coming sessions.

Bitcoin Dollar Correlation on the Hourly Chart. Source: TradingView.com

The dollar is falling after the shock on the job market

In detail is the US dollar index (DXY), which measures the strength of the greenback against a basket of six foreign currencies, including the euro and the pound sterling, it hit USD 94.50 on Thursday for the first time since September 28, 2020. However, it fell behind projections of a decline due to the surge in unemployment benefit claims in the US.

Labor data released on Thursday showed the number of jobless claims rose to 362,000 last week, up from 351,000 the previous week. and against the forecast of economists of 333,000. In this way, the number of applications stagnated at around 2.8 million for five consecutive weeks.

Bitcoin price is approaching $ 50,000 as the dollar declines after hitting its one-year high
Bitcoin price is approaching $ 50,000 as the dollar declines after hitting its one-year high

For the markets, this could be the news that the Federal Reserve is reducing its $ 120 billion. This temporarily sustains the lower interest rates and the renewed strength of the dollar.

DXY daily price chart. Source: TradingView.com

The index stood at 94,263 at the time of this writing.

The technical outlook predicts an increase for Bitcoin and a decrease for the dollar

This was also shown by the technical data the dollar is threatened with a correction. For example, independent market analyst TradingShot found that the dollar index is within a megaphone pattern, poised to rise to the top to chase a correction in the next few sessionsas shown in the graphic below.

Daily price chart of the US dollar index with the technical settings of the megaphone. Source: TradingShot, TradingView.com

“Based on the 1-Day Relative Strength Index (RSI), it looks like the DXY is at the top of the lineup [fue] on August 15, 2018 “, wrote TradingShot.

“The DXY builds up a strong recoil to the bottom of the megaphone.”

In the meantime, a recent streak of sell-offs in the Bitcoin market resulted in a descending wedge pattern being painted. In detail, descending wedges appear when price tends to fall into a channel that includes two divergent and descending trend lines.

Traditional analysts see the falling wedge pattern as a bullish reversal indicator, Note that a break above the top trendline causes the price to rise by the maximum distance between the wedge trendlines.

Daily price chart of the BTC / USD pair with the setting of the descending wedge. Source: TradingView.com

The maximum height of the structure is approximately $ 10,000. As a result, Bitcoin price can retest at least $ 50,000 if the wedge breakout occurs as intended.

A weaker dollar means a stronger bitcoin

Secondly, the disappointing job report could fuel cautious investor appetite for Bitcoin.

Vasja Zupan, chairman of the Matrix Exchange, told Cointelegraph that The weakness of the dollar and the devaluation in the face of rising inflation will continue to drive investors to put their excess money into the cryptocurrency markets. Called:

“Bitcoin in its core message has a built-in hedge against inflation, and therefore persistently higher inflation in the US can only drive it up. Therefore, the value of the dollar will still be lower than that of Bitcoin in the long run.

The views and opinions expressed are those of the author only and do not necessarily reflect the views of Cointelegraph.com. All investments and operations involve risk, so do your own research when making a decision.

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