Dollar, Divergences, & More: Here’s Why Bitcoin Could Soon Bounce

Tony "The Bull" Severino

4 years ago

3 mins read

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Bitcoin has fallen steeply since setting a high around $58,000 per coin earlier this month. After now days in a row of downside, and a sweep of lows, there’s a bullish divergence brewing that could take the leading cryptocurrency by market cap soaring back higher.

At the same time, the dollar is once again weakening after a short-term bounce, and could help fuel the momentum to send Bitcoin to new records. Here’s a detailed look at why BTC could soon see a strong bounce.

Bitcoin Readies Rebound As Dollar Hits Resistance

Bitcoin has had an epic start to 2021 and a strong continuation of the bull trend that blossomed back in 2020 following Black Thursday. The direction has been only up since, with only a few bouts of corrections along the way.

The most recent drop cut more than 20% off the price per coin, coinciding with a strong bounce in the dollar as market participants begin to reduce leverage and associated risk. However, the dollar is already back to weakness, according to one crypto analyst.

The dollar has been rejected at low timeframe resistance and BTC could respond | Source: DXY on TradingView.com

The dollar trades inversely correlated to the leading cryptocurrency by market cap, and represents one half of the asset’s base trading pair (BTCUSD).

The dollar is the global reserve currency and has been particularly strained throughout the pandemic. Inflation related to growing money supply has weakened the dollar, but benefitted Bitcoin.

How The Top Cryptocurrency Could Be Staging A Turnaround

The dollar bounce appears to have been short-term profit-taking, or a reduction in risk, and is ready to turn back down. If that happens, it could be an added catalyst for the cryptocurrency to get back to its uptrend sooner than later.

A bullish divergence could help the leading cryptocurrency refuel its jets | Source: BTCUSD on TradingView.com

A bullish divergence on Bitcoin 4H charts also points to at least a short-term recovery, if not a resumption of the prevailing and powerful uptrend.

The month of March has historically been the bloodiest month for Bitcoin, but big buyers continue to absorb the dwindling BTC supply available from institution-focused platforms like Coinbase Pro.

Related Reading | Why March Is The Bloodiest Month In Bitcoin History

A deeper correction in Bitcoin isn’t necessarily bearish, as it could allow more institutions to buy in at lower prices, who will ultimately hold stronger than the weaker hands they’re buying from.

Considering the bullish divergence and continued weakness in the dollar, Bitcoin could be right back to its uptrend in no time at all, and a bounce could already be underway.

Featured image from Deposit Photos, Charts from TradingView.com

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.

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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