BTC vs. DXY - Opposing Peaks & Troughs Leads to new Low vs. High
First, let me preface this with the fact that I'm typically bullish on Bitcoin, but with all of the recent rhetoric surrounding recession (and just as a general rule of thumb) we do have to consider alternative views. This is me taking a different look at Bitcoin through that lens:
So - When Bitcoin began its epic rise in 2016-17, around 2017 we saw DXY top out around 103 and begin to fall as Bitcoin approached a new ATH around mid-December of 2018.
Almost exactly one month later, DXY bottomed out at around 88-89 and since then began forming a parallel channel between it's low and high.
As we approached DXY's next visit at the top of its channel in mid-March of 2020, we also experienced the so-called "Covid Crash" across markets, with Bitcoin finding its bottom at what appears to be a rising wedge on the 3d log chart, as shown above.
Following 2020's crash, Bitcoin began another epic run, and DXY reached troughs near channel bottom (each with higher lows), both within ~3 months of Bitcoin reaching its new ATH and completing the top of the rising wedge formation shown above, with its 2nd high falling slightly below wedge top, similar to DXY failing to find a low at channel bottom.
This brings us to today:
DXY:
- Now DXY has broken above its parallel channel, and if you zoom out to view much higher time-frames, it has also broken out of a falling wedge, and appears to want to make a run. 1x, 1.5x and 2.5x channel break targets shown on the 3d chart above.
NOTE - We have not yet re-tested the top of the channel however, while Bitcoin is re-testing the bottom of its wedge. Things could still turn in the opposite direction and we could form a new Peak and Trough here instead.
For the long-term HTF 3m chart, it is shown below:
BTC:
- Meanwhile, Bitcoin has broken below its rising wedge, and appears to want to revisit lows it hasn't seen in years. 1x, 1.5x, and 2.5x rising wedge break targets shown on the 3d chart above.
NOTE - Presently, we are re-testing the bottom of that wedge after having broken below it, while DXY hasn't yet re-tested channel top. Again, things could turn around in the opposite direction and we could form our new Peak and Trough in the area where we are now instead.
These two things correlate and have shown correlation historically, as you can see on the chart. Should we actually enter a severe recession as many seem to think we're headed for, this is what I think might occur, and the chart provides us evidence that it is possible.
So - When Bitcoin began its epic rise in 2016-17, around 2017 we saw DXY top out around 103 and begin to fall as Bitcoin approached a new ATH around mid-December of 2018.
Almost exactly one month later, DXY bottomed out at around 88-89 and since then began forming a parallel channel between it's low and high.
As we approached DXY's next visit at the top of its channel in mid-March of 2020, we also experienced the so-called "Covid Crash" across markets, with Bitcoin finding its bottom at what appears to be a rising wedge on the 3d log chart, as shown above.
Following 2020's crash, Bitcoin began another epic run, and DXY reached troughs near channel bottom (each with higher lows), both within ~3 months of Bitcoin reaching its new ATH and completing the top of the rising wedge formation shown above, with its 2nd high falling slightly below wedge top, similar to DXY failing to find a low at channel bottom.
This brings us to today:
DXY:
- Now DXY has broken above its parallel channel, and if you zoom out to view much higher time-frames, it has also broken out of a falling wedge, and appears to want to make a run. 1x, 1.5x and 2.5x channel break targets shown on the 3d chart above.
NOTE - We have not yet re-tested the top of the channel however, while Bitcoin is re-testing the bottom of its wedge. Things could still turn in the opposite direction and we could form a new Peak and Trough here instead.
For the long-term HTF 3m chart, it is shown below:
BTC:
- Meanwhile, Bitcoin has broken below its rising wedge, and appears to want to revisit lows it hasn't seen in years. 1x, 1.5x, and 2.5x rising wedge break targets shown on the 3d chart above.
NOTE - Presently, we are re-testing the bottom of that wedge after having broken below it, while DXY hasn't yet re-tested channel top. Again, things could turn around in the opposite direction and we could form our new Peak and Trough in the area where we are now instead.
These two things correlate and have shown correlation historically, as you can see on the chart. Should we actually enter a severe recession as many seem to think we're headed for, this is what I think might occur, and the chart provides us evidence that it is possible.
