While Bitcoin is touted as uncorrelated, the cryptocurrency has been following the inverse of one asset over the past few months: the U.S. dollar. Like gold, BTC’s price action is partially dictated by the value of fiat currencies.
Over the past few months, the negative correlation gold and Bitcoin have with the U.S. dollar has been exacerbated.
Unfortunately for BTC, then, there are analysts expecting the U.S. dollar to bounce in the coming weeks. This could put pressure on Bitcoin, forcing it back under $10,000.
Related Reading: Here’s Why This Crypto CEO Thinks BTC Soon Hits $15,000
The Dollar Could Soon Bounce: Here’s What That Means for Bitcoin
A leading cryptocurrency trader believes that the Dollar Index, which tracks the value of the U.S. dollar against a basket of foreign currencies, is in a textbook bull pattern.
He shared the chart below, depicting that the asset is trading in a textbook descending broadening wedge:
“My thoughts on $DXY. Now I’m not a fan of descending broadening wedges and this isn’t the cleanest example out there- but I think it could play out. Probably one of the rare instances you will ever see me post a broadening wedge-ish like pattern. Chart from yesterday and today.”
Chart of the DXY over the past few months with a range analysis by crypto trader "Trader XO" (@TraderXOXO on Twitter). Chart from TradingView.com
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