DXY: an indicator to forecast Bitcoin’s direction

28 พ.ค.

Just like USDT Dominance, US Dollar Index (DXY) has a somewhat inverse correlation with Bitcoin's direction. If we look at the DXY historically, whenever the DXY was in a downtrend or sideways movement, Bitcoin was in an uptrend. Also, whenever the DXY was in an uptrend, Bitcoin was in a downtrend. Simply put, if the DXY goes up, that means the U.S. dollar is gaining strength or value when compared to other assets and currencies. So, people/traders tend to hold the U.S. dollar instead of, say, Bitcoin. And when DXY goes down, that means the U.S. dollar is depreciating in value, so people/traders tend to hold other assets like Bitcoin or Gold.

28 พ.ค.

บันทึกช่วยจำ

Now, from a distance or long-term view, the DXY has been in oscillation since the start of the current Bitcoin's upward wave. But from a closer look or short-term view, DXY is moving in an ascending channel. And that means Bitcoin is going down. At least, that is what the chart says. Unless DXY breaks this channel downward. Let's see what happens.

29 พ.ค.

บันทึกช่วยจำ

So, it seems DXY is moving up in its current ascending channel. If true and DXY indeed goes up, there are two possible targets for DXY's upward wave, and that means there are two possible targets for Bitcoin's downward wave. 1) Either DXY can't rise higher than the minor horizontal area. In this case, Bitcoin's correction will most likely end between two current vertical lines. 2) Or DXY rises all the way up to the major inverted wedge's upper line. In this case, Bitcoin's correction will most likely end between the next two vertical lines. Let's see what happens.

3 มิ.ย.

บันทึกช่วยจำ

So, the good news is that DXY is trying to break the ascending channel. If successful, DXY coming down and Bitcoin is going up. Let's see what happens.

10 มิ.ย.

บันทึกช่วยจำ

So, as it turned out, DXY made a stop-hunt or false breakout, and the two scenarios are still valid. Let's see what happens.

28 มิ.ย.

บันทึกช่วยจำ

So, DXY analysis is still valid and progressing. It seems a harmonic pattern is forming; if true, a downtrend movement could occur for DXY, and that means an uptrend for Bitcoin. Although, it is only for short-term period. Long-term wise; have to wait for DXY to break major trend lines. Let's see what happens.