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Breaking News: Coinbase Confirms DOJ Investigation Following Major Security Incident

Is The Dollar Index Making New 2021 Highs Dangerous For Bitcoin?

Tony "The Bull" Severino
Tony "The Bull" Severino
1 year ago
3 mins read
dollar bitcoin high dxy strength

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The recent nerves in the stock market and macro world has caused the dollar to surges to a new 2021 high, just as Bitcoin continues to set new records. 

But is the greenback’s awakening a dangerous situation for cryptocurrencies, or is something else afoot?

BTC Barely Reacts As DXY Taps New 2021 High

Bitcoin price is in price discovery mode, after breaking its former high set earlier in the year. The cryptocurrency is pitched as a replacement for gold, and even the dollar – the current global reserve currency. 

Cryptocurrencies, commodities, and everything else are priced in dollars as the most dominant currency acting as the base conversion rate. This means that Bitcoin price increases inversely to the dollar on the BTC/USD trading pair. 

Related Reading | 10 Bullish Monthly Bitcoin Price Charts To Start November

So it is unusual that Bitcoin continues to tap new highs all while the DXY Dollar Currency Index has reached the highest level of all of 2021. 

dxy dollar currency index

The dollar currency index has reached a new 2021 high | Source: DXY on TradingView.com

The Dollar Strength Keeps Bitcoin Price At Bay 

The DXY is a weighted basket of forex currencies trading against the US dollar (USD). That basket includes major trade partners, the Euro (EUR), Japanese yen (JPY), British pound sterling (GBP), Canadian dollar (CAD), Swiss franc (CHF), and the Swedish krona (SEK).

The highs in the DXY could be indicative of weakness in the currencies in the basket, or strength in the dollar itself. Bitcoin’s current performance or lack of strong reaction after new highs, could more so be due to strength in the dollar holding the cryptocurrency back. 

Not every touch of this trend line has been pleasant.  | Source: BTCUSD on TradingView.com

Both assets making yearly highs is highly suspect, and could suggest a bigger reaction brewing in one or both sides of the BTC/USD pair. Bitcoin price also happens to be touching a trend line where such a reaction occurred in the past. 

Related Reading | Want To Learn Technical Analysis? Read The NewsBTC Trading Course

An uptrend is defined as a series of higher highs and higher lows – something characteristic of both assets in the short term. What is very different between the two, is the longer term trend. For Bitcoin, the primary trend has been up while for the dollar has been down. 

One of these assets is in an uptrend, the other is not | Source: BTCUSD on TradingView.com

After this short term move completes, each asset should resume its previous trajectory, unless the trend is ready to change for a long time to come. 

https://twitter.com/tonyspilotroBTC/status/1458912069575757831

Follow @TonySpilotroBTC on Twitter or join the TonyTradesBTC Telegram for exclusive daily market insights and technical analysis education. Please note: Content is educational and should not be considered investment advice.

Featured image from iStockPhoto, Charts from TradingView.com
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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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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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