BITCOIN vs USD vs S&P500 What 2022 will be like. HAPPY NEW YEAR!

31 ธ.ค. 2021

As 2021 comes to an end, we can make a review of how the year went and attempt to project how 2022 might be like for Bitcoin. In this attempt, I've charted BTCUSD (orange trend-line) against the U.S. Dollar Index/ DXY (green trend-line) and the S&P500 (blue trend-line).

As you see, based on the correlations of those, BTC can be divided into phases of Bull (green), Bear (red) and Accumulation (yellow). Basically the whole 2021 was a year of accumulation as BTC traded generally sideways. At the same time the Dollar rose as well as the S&P. It can be argued that what kept BTC within accumulation and not a new Bear Cycle, was the strong rise of S&P throughout the year as typically a rising Dollar brings a Bear Cycle on BTC. Similarly, when the Dollar falls (or at least stays sideways) while the S&P rises, BTC enjoys a Bull Cycle. A sharp fall on the Dollar in particular is what brings BTC's parabolic rally.

So based on what this chart illustrates, we can argue that as long as S&P500 keeps rising or the Dollar stops rising, BTCUSD won't enter a new Bear Cycle. We may see an extension of this accumulation phase then if the theory of lengthening (mega) cycles is true. If the Dollar start falling though and attempts to reach the bottom levels of February 2018 and January 2021, we may see a new parabolic phase in 2022.

Keep an eye on these important correlations and don't lose sight of the bigger picture picture in 2022!


The TradingShot team wishes you a Happy New Year!!




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