Bitcoin price It is currently in a difficult situation and may be about to lose its support of around US$56,000. But is the recent weakness in the cryptocurrency market more of a factor in the strength of the U.S. dollar?
TD Sequential triggers anti-correlation signals on BTCUSD and DXY
A few weeks ago, we asked whether the U.S. dollar currency index will hit a new high in 2021 A dangerous situation for BitcoinAfter more than $10,000 per coin disappeared from the price of BTC, the answer is yes.
However, just as the cryptocurrency upward trend suddenly stopped in late 2020 and early 2021, even the short-term destruction of the US dollar must be completely stopped at some point.
Related Reading | 10 bullish Bitcoin monthly price charts starting in October
The possibility of reversal is here, according to TD sequence – Market timing indicator created by Thomas Demark. The idea behind this tool is that after a specific candle sequence is made, the conditions for reversal are met.
This situation is usually indicated by 9 settings or 13 countdowns. However, the 8th candle before the 9th candle can also produce this result, and the tide can indeed be changed at any time-the tool just highlights the time when it is most likely to occur.
In the image below, both Bitcoin and DXY There is the opposite signal-making each asset more likely to be reversed.
Inverse TD setups could spell reversal | Source: DXY on TradingView.com
Bitcoin weakens, U.S. dollar strengthens
In the chart above, there are some important things to note, which may indicate that the reversal is not yet fully prepared. For example, DXY has not yet “completed” its 9-point count. at the same time, Bitcoin price Only counts at 8, but it has been perfected.
The count will be perfected only when the last candle of the series exceeds the rest of the series. A perfect setting still does not guarantee results, but it will further increase the chances of success.
Bulls take the stairs up, bears take the elevator down | Source: BTCUSD on TradingView.com
There is no greater risk of a reversal in Bitcoin prices until Upward trend Daily support has been broken. The above ladder pattern will be broken when the closing price is below $54,000-this ladder pattern has not been broken in the past upward trend until they are confirmed to end.
The reason why Bitcoin fell sharply after hitting a new high is likely to be As the dollar strengthens, And the weakness of the first cryptocurrency. The last time the Bitcoin price reached such a level, the value of the U.S. dollar was much lower compared to using DXY. With DXY making a comeback, the king of cryptocurrency doesn’t look as powerful as before.
However, the focus of this article is to emphasize the dependence of the two assets on TD Sequential, which may turn this strength into a very short-lived trend.
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Featured image from iStockPhoto, Charts from TradingView.com