Read on Twitter
$DXY - a thread.
what do bitcoin, bear markets and the federal reserve all have in common?
the answer is $DXY (the United States Dollar Index)
what do bitcoin, bear markets and the federal reserve all have in common?
the answer is $DXY (the United States Dollar Index)
i'm a day trader. it's my job to look at charts and use them to predict the future.
it's difficult, but not impossible...and sometimes you come across something so important that it completely changes your view on the market
it's difficult, but not impossible...and sometimes you come across something so important that it completely changes your view on the market
back in 2018, i was definitely a lot dumber than i am now.
i barely understood charts, had no concept of a "bear" vs. "bull" market and had never given thought to the importance of the dollar in relation to speculative assets such as stocks, precious metals or cryptocurrencies
i barely understood charts, had no concept of a "bear" vs. "bull" market and had never given thought to the importance of the dollar in relation to speculative assets such as stocks, precious metals or cryptocurrencies
fast forward 3 years later and here I am slightly less stupid and a bit more experienced...yet still wondering why I lost so much money in 2018
and then i saw this chart
and then i saw this chart
i present to you the $DXY (United States Dollar Index)
the $DXY is an index of the value of the dollar relative to a basket of foreign currencies
if the $DXY is going up, the dollar is considered to be strong. if the $DXY is going down, the dollar is considered to be weak
the $DXY is an index of the value of the dollar relative to a basket of foreign currencies
if the $DXY is going up, the dollar is considered to be strong. if the $DXY is going down, the dollar is considered to be weak
a strong dollar may be good for the United States, but it's not ideal for the stock market (well, bulls at least)
you see, as most speculative assets (stocks, metals, cryptos) tend to be denominated in dollars...
as the value of the dollar goes up, the price of assets go down
you see, as most speculative assets (stocks, metals, cryptos) tend to be denominated in dollars...
as the value of the dollar goes up, the price of assets go down
in 2017, while bitcoin was in the midst of its largest rally ever (at the time 
) the $DXY was going down
remember, as the value of the dollar goes up, prices go down...which means as the value of the dollar goes down, prices go up!
) the $DXY was going downremember, as the value of the dollar goes up, prices go down...which means as the value of the dollar goes down, prices go up!
and then, just as the world started collectively finding interest in cryptocurrencies...the bubble popped
on Dec. 18th, 2017 bitcoin topped entered the beginning of its 1 year bear market...
on Dec. 18th, 2017 bitcoin topped entered the beginning of its 1 year bear market...
the most interesting part of this all, is that in 2018 when $DXY bottomed it had been breaking out of a downtrend at a price of just about 90
and what price is $DXY at right now?
once again, you guessed it...about to break out of a downtrend at just about 90
and what price is $DXY at right now?
once again, you guessed it...about to break out of a downtrend at just about 90
now with the information we have, i propose three questions that we can answer together to help us navigate this market
1 - does history repeat itself?
2 - what's changed?
3 - is bitcoin topped out?
1 - does history repeat itself?
2 - what's changed?
3 - is bitcoin topped out?
1 - does history repeat itself? yes and no...
history doesn't repeat itself but it often does rhyme.
is 90 a magic number for $DXY? it was in 2017/2018, but at the top of bitcoin's bull market in 2013, $DXY was at 80.
no real indication of a pattern just yet
history doesn't repeat itself but it often does rhyme.
is 90 a magic number for $DXY? it was in 2017/2018, but at the top of bitcoin's bull market in 2013, $DXY was at 80.
no real indication of a pattern just yet
2 - what's changed? a lot.
ever since covid hit, the U.S. has been printing money at an unprecedented rate.
and with biden's new 1.9 trillion dollar relief plan, it doesn't seem there is an end in sight.
ever since covid hit, the U.S. has been printing money at an unprecedented rate.
and with biden's new 1.9 trillion dollar relief plan, it doesn't seem there is an end in sight.
3 - is bitcoin topped out? yes. wait, no?
i'm not sure. in a parabolic uptrend, it's nearly impossible to guess a possible top.
we have the $DXY right at 90, and it looks like its downtrend is about to break...but what if it doesn't? what if the printing is just too much?
i'm not sure. in a parabolic uptrend, it's nearly impossible to guess a possible top.
we have the $DXY right at 90, and it looks like its downtrend is about to break...but what if it doesn't? what if the printing is just too much?
what if it resumes dumping before this trendline breaks?
what if it breaks the trendline and then goes sideways before dumping?
or better yet, what if it breaks this trendline before going sideways and then pumping...but not until JUNE.
what if it breaks the trendline and then goes sideways before dumping?
or better yet, what if it breaks this trendline before going sideways and then pumping...but not until JUNE.
regardless, i don't know what's going to happen. nobody does.
but one $DXY support level/trendline in the midst of the chaos that has been 2020/2021 is not enough for me to claim bitcoin's rally is over
even if this $DXY level does hold...who knows when it will start going up
but one $DXY support level/trendline in the midst of the chaos that has been 2020/2021 is not enough for me to claim bitcoin's rally is over
even if this $DXY level does hold...who knows when it will start going up
it could take weeks, if not months...and at that point bitcoin could have doubled its price (or more)
when bitcoin inevitably does crash, lots of people will say they saw it coming...
but there isn't much of a difference between being wrong and being early.
when bitcoin inevitably does crash, lots of people will say they saw it coming...
but there isn't much of a difference between being wrong and being early.
i want to know the bitcoin top as much as the next guy, but for now i'm focused on finding altcoins that will outperform in 2021.
for a list of my favorites, along with trading tricks and tutorials, join the nearly 5,000 others in my free public telegram http://t.me/tunezalpha
for a list of my favorites, along with trading tricks and tutorials, join the nearly 5,000 others in my free public telegram http://t.me/tunezalpha
