‘Bitcoin’s Fate Hangs in the Balance as ‘Kiss of Death’ Looms on DXY’

"Technical Breakdown and Fibonacci Resistance Rejection Deepen Bearish Outlook for DXY"

The DXY, which measures the strength of the US dollar against a basket of other major currencies, is facing a bearish case as it experiences a clear rejection at a significant Fibonacci resistance zone. This rejection is not just a typical pullback, but it is occurring at a high time frame resistance level, making it a significant event for chart watchers. Adding to the bearish sentiment is the breach of the blue uptrend line, which had been supporting the index since July. This violation of the trend suggests a shift in momentum and indicates that the dollar’s prolonged period of strength may be losing steam.

Meanwhile, attention is turning to the Bitcoin chart, where there is a sense of anticipation. Bitcoin has historically had an inverse relationship with the US dollar, meaning that when the DXY weakens, Bitcoin often rallies as alternative assets become more attractive due to the decrease in dollar strength. Several lower time frame indicators on the Bitcoin chart have also turned green, supporting the cryptocurrency’s upward trajectory. If the DXY continues to decline, we could see a simultaneous increase in Bitcoin’s value, potentially pushing it to new highs. The market sentiment seems to favor risk-on assets, which tend to perform well in a weakening dollar environment.

The CEO and lead analyst of Glassnode, a prominent on-chain analytics firm, shares this sentiment and believes that the DXY is likely to experience further downside after breaking its channel and encountering the Fibonacci resistance. With such technical confluence, market participants are closely watching for any potential implications on cryptocurrency markets.

It is important to note that this article was originally published on U.Today, a reputable source for cryptocurrency news and analysis.

Martin Reid

Martin Reid

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