This comparison between Bitcoin and the dollar says that the crypto winter is over
Bitcoin price is struggling to overcome resistance between $28,000 and $30,000 per coin. However, BTC and the US dollar seem to be following a similar pattern as they both did in late 2020, leading to the latest bull run in cryptocurrencies.
Check out this DXY versus BTCUSD comparison you can’t afford to miss and see why it could signal the official end of crypto winter.
Bitcoin Price Consolidates Under Resistance
The Bitcoin price is currently trading just below $28,000. Despite the lack of continued momentum at resistance, there has also been a distinct lack of a rejection.
In a market as volatile as crypto, prices rarely stay in a tight range for very long. And when they do, the release of volatility is always worth the wait.
Lacking a more prominent pullback, BTCUSD has consistently made higher highs and higher lows. Losing the current level will break that structure and a rounded support that has been built for years. However, holding it could provide a move around late 2020, when BTC was from $10,000 to $60,000 per coin.
The comparison below shows that much like BTCUSD struggled with $12,000 resistance and eventually went explosive at the moment if it finally broke the key level, a decisive push above $30,000 per coin could do the same.
Will a similar divergence in the two assets form? | BTCUSD on TradingView.com
Why the DXY Dollar Index Says Crypto Winter Is Done
If the price action holds at current levels, the rounded support structure will also begin to take on a parabolic shape. Bitcoin lately has gone on parabolic rallies lasting 12,000% or more. The last parabolic rise lasted 1200% return.
In the above comparison we can see that in 2020 DXY broke below what would be the same rounded support that BTCUSD is forming now. Once again, DXY is poised to break through the rounded bottom. As the top cryptocurrency by market capitalization held firm and the dollar fell further, all the ingredients were there for an incredible bull run.
DXY is an index of the US dollar that trades against a weighted basket of other top currencies such as the pound and the yen. Although it has nothing to do with Bitcoin or crypto, it tells the market when the dollar is strong or weak. With the USD being half of the BTCUSD trading pair, the dollar weakness at the moment is a boon for Bitcoin and crypto.
If DXY falls further, much like the inverse correlation in the comparison above shows, Bitcoin could skyrocket to new all-time highs.
This looks like a repeat of 2020 minus a pandemic
DXY vs #Bitcoin comparison pic.twitter.com/imSzY8aVrW
— Tony “The Bull” (@tonythebullBTC) 8 May 2023
