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Breaking News: Trump Prepares To Allow Crypto Investments In $9 Trillion Retirement Market

Why The Dollar’s Coming Dead Cat Bounce Could Be Devastating For Bitcoin

Tony "The Bull" Severino
Tony "The Bull" Severino
1 year ago
3 mins read
bitcoin dollar dead cat bounce

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Created by industry experts and meticulously reviewed
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The dollar is in sharp decline, and it has allowed other currencies to gain the upper hand. It has also let Bitcoin, gold, altcoins, and other hard assets shine.

But will a coming dead cat bounce in the dollar devastate recent crypto market returns and cause a temporary pullback? Or is this the start of a bigger comeback by the king of all cash-based fiat currencies?

USD: After Dramatic Drop To Two Year Low, TD Sequential Triggers 9 & 13 Buy Signals

Nearly every financial asset across any market is traded against the dollar and its exchange rate is valued in USD. Even Bitcoin, gold, and altcoins typically trade against the dollar as the dominant base currency pair.

The dollar’s status as the global reserve currency gives it incredible influence over all other markets. When the dollar is strong, so is the United States economy, and stocks boom as a result.

But when the dollar is in decline, as we’ve witnessed recently, hard assets like gold, Bitcoin, and real estate climb. The recent fall in the once almighty and dominant dollar set the currency back to a fresh two-year low.

dollar dxy bitcoin td sequential

DXY TD Sequential 9 + S13 Setup | Source: TradingView

According to the TD Sequential indicator, a dead cat bounce or perhaps a full comeback is near. The market timing indicator has triggered a 9 and 13 buy setup on daily DXY charts. DXY is the dollar currency index weighing its performance against the rest of the market.

Related Reading | Here’s Why a Bouncing U.S. Dollar Is Bad News For Bitcoin

Further technical analysis backs up the indicator’s call that a reversal could soon be coming in the dollar. DXY is currently forming a falling wedge ready to break out, coinciding with a bullish divergence on the Relative Strenght Index.

dxy dollar bitcoin btc

DXY Falling Wedge and Bearish Divergence on RSI | Source: TradingView

Why A Dead Cat Bounce In The Dollar Is Bad For Bitcoin, Gold, and Altcoins

A bouncing dollar doesn’t bode well for Bitcoin’s recent rally, which could see a pullback as a result. This is best demonstrated by comparing Bitcoin against an inverse DXY dollar currency index chart to better depict the dollar’s continued weakness versus Bitcoin’s strength.

dxy dollar bitcoin btc

Inverse DXY Line Chart Rising Wedge | Source: TradingView

Flipping the DXY chart in the inverse, turns the falling wedge into a rising wedge, a bearish structure signaling a reversal.

Related Reading | Crypto Is Up Over 80% in 2020—and Google Users Are Taking Notice

Removing the trendlines completely, and adding in a Bitcoin BTCUSD line chart from Bitstamp very accurately lines up the cryptocurrency’s rise with the dollar’s inverse decline. The resemblance is undeniably uncanny. It also shouldn’t be surprising as the cryptocurrency trades against USD on its primary base currency pair.

dxy dollar bitcoin btc

Bitcoin BTCUSD Bitstamp Versus Inverse DXY Line Chart Comparison | Source: TradingView

A breakdown of the inverse dollar’s rising wedge could take Bitcoin price down with it. Not just Bitcoin, either. The dollar reversing will also tarnish gold’s recent gains, and potentially deal a major blow to the recent altcoin rally.

Major altcoins like Ethereum, XRP, and several others have benefit even more so than Bitcoin due to the dwindling dollar. With USD reversing, altcoins may nuke on their fiat-bound trading pairs.

Markets are unpredictable, however, and even with all signs pointing to a rebound in USD, anything is possible given the ongoing pandemic situation in the US.

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Tony "The Bull" Severino
Tony "The Bull" Severino

Tony "The Bull" Severino

Tony "The Bull" Severino, CMT, is a distinguished figure in the cryptocurrency analysis sector, renowned for his in-depth technical expertise and innovative approach to market trends. As the Head of Research at NewsBTC, Tony leads a team dedicated to providing cutting-edge insights and forecasts, helping both novice and experienced traders navigate the complexities of the crypto market.
A seasoned Chartered Market Technician, Tony's prowess in identifying and capitalizing on market patterns is unmatched. His academic and professional journey in market analysis has firmly established him as a leading authority in technical trading strategies. Tony’s approach is heavily influenced by the principles of Elliott Wave Theory, a method known for its rigorous assessment of investor psychology and price movements.

Read more

Beyond his role at NewsBTC, Tony is the visionary founder of CoinChartist.io, an educational platform aimed at demystifying the nuances of cryptocurrency trading. CoinChartist.io serves as a valuable resource for traders seeking to enhance their technical analysis skills. The platform offers a range of learning tools and resources designed to empower traders with the knowledge to make informed trading decisions.

In addition to his educational initiatives, Tony is a prolific author and a dominant voice in the crypto community. He writes the CoinChartist VIP newsletter, a weekly dispatch that has become a staple among crypto enthusiasts, revered for its insightful analysis and actionable trading advice. This newsletter has consistently ranked as a best-seller on SubStack, boasting thousands of subscribers who rely on Tony’s expertise to guide their trading strategies.

Tony is also celebrated for his literary contributions to the field. He is the author of the highest-rated Crypto Trading Journal on Amazon.com, a testament to his ability to communicate complex trading concepts in an accessible manner. This journal is widely regarded as an essential tool for traders aiming to track their progress and refine their strategies.

Before his ascent in the financial analysis world, Tony honed his skills in journalism. His background in this field has endowed him with a unique ability to present intricate market dynamics in a clear and compelling manner, making his insights highly sought after by a broad audience that ranges from casual readers to professional traders.
His professional affiliations underscore his commitment to excellence and continuous learning. As a partner of Elliott Wave International and TradingView, Tony collaborates with other leading experts to enhance his knowledge and skills. His active membership in the CMT Association further aligns him with the highest standards of industry practices and ethics.

Tony’s nickname, "The Bull," aptly reflects his aggressive and optimistic outlook on the cryptocurrency markets. His forecasts often anticipate significant upturns, earning him a reputation for bullish predictions that have frequently led to lucrative outcomes for those who follow his advice.

In summary, Tony "The Bull" Severino, CMT, is more than just a technical analyst; he is a mentor, educator, and innovator whose influence in the cryptocurrency space continues to grow. His dedication to advancing the understanding of market forces and his commitment to providing high-quality, reliable analysis make him a pivotal figure in the world of cryptocurrency trading.

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Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality
Created by industry experts and meticulously reviewed
The highest standards in reporting and publishing
How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Ad discliamer

Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio.

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