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Home Technical analysis BTC

The Dollar Losing A Decade Long Trendline Could Send Bitcoin Skyrocketing

Tony Spilotro by Tony Spilotro
4 months ago
in BTC
Reading Time: 3min read
dollar btc crypto dxy bitcoin usd

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The year was 2009 and the dollar had just recovered from The Great Recession. Bitcoin was born and grew up while the dollar regained its throne. After ten years of strengthening, the pandemic and associated monetary response to sustain the economy, caused the almighty dollar to weaken again.

And according to the Dollar Currency Index losing a decade long trendline, this weakness could allow Bitcoin to gain ground against USD like never before.

The Birth Of Bitcoin And The Delayed Death Of The Dollar

Bitcoin’s very design and existence are in direct opposition to the dollar. Over the last one hundred years or so, the United States Dollar has dominated the globe as the reserve currency asset.

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And while The Great Recession and the resulting money-printing bank bailouts first hurt the dollar, a more than ten-year recovery prevented any economic collapse.

But because printing more money only delays the inevitable, a brilliant and selfless individual by the pseudonym Satoshi Nakamoto sought to break the cycle and created the first-ever cryptocurrency: Bitcoin.

Related Reading | Bitcoin Rally Isn’t Just Institutional Driven, Emerging Markets Are Voting For Revolution

The fiat money supply is ever-expanding, with 20% of US dollars printing in 2020 alone, while there will only ever be 21 million BTC. Rather than being an inflationary asset that loses value over time as its total capitalization expands, Bitcoin is deflationary.

And because it is decentralized, governments cannot control it or manipulate it to create more BTC, and with it more problems.

DXY Biitcoin head and shoulders dollar skyrocketing

The dollar is losing a decade long trendline starting around when Bitcoin was just a baby | Source: DXY on TradingView.com

The Great Recession Recovery Trendline Breaks Down: What It Could Mean For Crypto

The ten-year trend line that supported the dollar all while Bitcoin learned to walk, and eventually run, is breaking down on monthly timeframes for the first time since the cryptocurrency was first created.

The last major breakdown of the dollar took place at the dollar’s peak in late 2016, but the trendline remained untested then. The steep fall in the DXY Dollar Currency Index mimics the trajectory of Bitcoin’s rise but in inverse.

As the dollar dove, the cryptocurrency climbed. No assets move up or down in a straight line, and the dollar began to bounce just as the crypto market topped in late 2017 and early 2018.

Related Reading | Bitcoin Indicator Reaches Historical Extreme: Price Sheds Two Thirds Upon Reversal

Consolidation in the dollar for three more years has begun to break down and it has lost the trendline, just as Bitcoin revisits the peak set at the last bounce.

The leading cryptocurrency by market cap is now back at $20,000, and according to the DXY Dollar Currency Index, the ten-year trendline breaking down, and a massive decade long head and shoulders topping pattern potentially confirming with a breach of the trendline, another 2017-like rally is almost a given at this point.

Not only is the dollar falling, but a new bull market is starting in Bitcoin. And while there is no denying the two things are correlated, where Bitcoin is now and then is a very different level in terms of price and adoption, making it likely that the cryptocurrency skyrockets as the dollar sells off to new lows.

Featured image from Deposit Photos, Charts from TradingView.com
Tags: bitcoinbtcbtcusdBTCUSDTcryptodollardollar currency indexdxyusdxbtxbtusd
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Tony Spilotro

Tony Spilotro

I'm Tony Spilotro. Behind the pseudonym, I'm a global remote work leader with a decade of award-winning content experience and excellence. Here, I explore my newfound passions pertaining to privacy, finance, economics, politics, cryptography, property rights, and other libertarian-esque views. I am a Bitcoin evangelist, maximalist, and educator whenever I can be, helping to spread its message of freedom from government control, monetary policy mismanagement, and passing the buck - literally – to future generations. My journey from a curious retail crypto investor to a serious Bitcoin advocate, trader, and technical analyst is an unusual one, but life-changing nonetheless and has become less about money and more about a long-overdue revolution. While a firm believer in the laws governing math and science, I am profoundly fascinated by the impact of astrology and astronomy including moon and solar cycles and planetary alignment and their ability to influence and potentially predict markets. It hasn't yet clicked for me as to how to put anything to use, but I consider it my current rabbit hole I can't yet dig out of. My perspective of growing up alongside the internet, the dot com era, the Great Recession, and roots in video games collecting coins and rare items caused Bitcoin to immediately make sense to me. Through all of these lenses, I seek to produce content that is educational and entertaining, and I thank you sincerely for taking the time to read what I have to say. Please follow me on Twitter and feel free to drop me a line if you would like to work together.

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