Here’s How The DXY Index Could Impact The Crypto Space
On Friday, i.e., November 4th, the US Department of Labor released the unemployment data, indicating an increase in the rate, which hit 3.7% for October. After the data was released, the US stock market and the crypto market heaved a sigh of relief as this could mean that the FED would not continue increasing the interest rates from here on out.Â
However, increased unemployment is definitely a bearish sign for the US Dollar Index (DXY), but what does this mean for the crypto space?
DXY and CryptoÂ
Well-known crypto analyst Justin Bennett has the answer.Â
He informs 110,500 Twitter followers that the increase in US unemployment rates is a bearish sign for the DXY but is highly bullish for Crypto.
Next, the analyst considers the present chart and claims that the hourly DXY chart indicates a fakeout. Also, he says he is still holding on to his prediction of 111.80 for DXY, which will bring in a bearish trend.
Justin Bennett further claims that the DXY value will affect the top cryptocurrencies like Bitcoin and Ethereum, and he claims 109.30 to be the critical level for DXY. This is because in the next week, if DXY closes below the said range, Crypto will see a bull run, and if DXY moves above 109.30, the crypto market will witness immense bearish pressure.Â
Dogecoin: What lies ahead?
The analyst also talks about the asset of the month- Dogecoin.
He says that if DOGE reclaims $0.13000, the currency will see new heights.Â
Now, as Dogecoin has claimed the $0.13000 area and is trading at $0.1309 after a rise of 6.29% in the last 24hrs, it appears that DOGE will see some new heights soon.
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DXY Index Reaching New Highs, Crypto Markets Could be in Distress This WeekendÂ
The crypto space is expected to be in dire straits as the top crypto, Bitcoin is currently switching above and below $19,000. The shaky environment could be due to the strengthening of the USD as the DXY index is surging high and marking a new 20-year high. Presently, the index has jumped above $113, making a new yearly ATH.
In the times when DXY Index is marking new highs, the crypto space has been impacted negatively. On the brighter side, the index is closer to dropping significantly close to $112 or below, but may soon rise above $114.Â
As per the above chart, the DXY index is assumed to drop as it did before in 2015-16. Here the DXY underwent a parabolic recovery from wave 1 to 3 after rebounding from wave 2. Further, the rally dropped to hit the 4 and later rebounded to wave 5. A similar trend is expected to repeat in recent times and may drop to $112 and later rise back beyond $114.Â
Therefore, a minor bounce may be expected with Bitcoin & entire crypto space. But as the index rises, the crypto markets may fall apart. Presently, the BTC price is again dropping back towards the demand zone between $18,277 and $18,928. If the asset fails to rebound from these levels, the price may witness a huge bearish trend in the coming days.Â
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Bitcoin Long Trades Pile Up While Surging DXY Index Haunts the BTC Price Rally – Coinpedia – Fintech & Cryptocurreny News Media
The dominant crypto, Bitcoin has been trading within bearish captivity for nearly 15 to 20 days and hence was expected to break the trend very soon. In the past couple of days, the price has been trying to surge above the immediate resistance. However, the current trade set-up denotes that the bulls have stepped out as the bears mark their strong presence.Â
Investors Bullish on Bitcoin
While the upcoming trend of the BTC price has become pretty unpredictable, more traders are confident of the asset pulling a significant leg up. Hence the volume of long trades has recently outperformed the short trades on Binance futures.Â
The data above displays the volume of the long trades & short trades in the past week. Despite the shaky price trend, the investors placed their bets on Bitcoin long more than shorts. As of September 01, nearly 67.59% of trades on Futures are long while 32.41% are short. Therefore, the possibility of the BTC price surging above $21,000 emerges, which may be followed by a notable drop.Â
Strengthening of DXY Index – A Bearish Case for Bitcoin
Conversely, the DXY Index, which determines the strength of the US Dollar is coiling up. After a minor rejection from 20-year high levels at 109.99, the asset failed to continue to remain within bearish captivity. Hence the Index, since the early trading hours has been extremely bullish, flashing the signals of marking new highs very soon.Â
The DXY Index is expected to surge slowly yet steadily and may retest the upper resistance in the coming weekend. Further, it may again experience a rejection, which could be reversed in a very short time ahead. In such a case, the Bitcoin price may experience tougher times as the possibility of a significant dump may be imminent.Â
Considering both cases, it is quite prominent that the descending consolidation of the asset is expected to prevail for some more time. As September month is largely believed to be bearish, the Bitcoin(BTC) price may maintain a low-key trend for a long.Â