Using DXY to Predict Bitcoin 📈 Winter for the Euro

٥ سبتمبر ٢٠٢٢

Hi Traders, Investors and Speculators 📉📈

Ev here. Been trading crypto since 2017 and later got into stocks. I have 3 board exams on financial markets and studied economics from a top tier university for a year.

If you're following multiple markets you'll e aware that the Euro trades at a 2-Decade low against the dollar, and that the Dollar Index (DXY) is trading at a 20 year high. Things are about to get much worse for the Euro - winter is coming. Russia recently added to Europe's energy crisis by shutting of key gas taps. With this, there is pressure on the ECB / Europe Central Bank to tighten monetary policy. As noted by Bloomberg, there are expectations for the central bank of Europe to raise rates with 75 basis points as soon as Thursday. This is bearish for the Euro, and bullish for the Dollar, as imports from the US increases over winter time. This is, in short, how I come to my conclusion and expectation of the continued rise of the DXY over the next few months. The only natural target, would be the previous ATH / resistance zone.

EURUSD Chart :


This brings us to the next topic, the correlation of the DXY to the Bitcoin chart. For this, it's quite simple to use the correlation coefficient technical indicator and too overlap the BTCUSDT chart. By doing so, we realize that there is a mostly inverse relationship between BTC and the DXY. Thus, to state the obvious, if the DXY continues to rise, we can expect the price of BTC to continue to fall. Interestingly enough, there are two confirmations around the 12K price mark for Bitcoin.

Thank you for watching, tune in again tomorrow !

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