• The DXY Dollar Currency Index is at an important inflection point, with the potential to affect the bull market in Bitcoin and other cryptocurrencies.
• The USD is an important part of most cryptocurrency trading pairs, so when it is strong, the other side weakens.
• If the MACD crosses bearish and confirms at the end of the month, it could cause bearish momentum to strengthen and create a dramatic decline in the dollar index.
The Almighty Dollar
The almighty dollar and once trending DXY are at an important inflection point with its potential to move crypto markets either way. The devastating impact of dollar dominance in 2022 has caused cryptocurrencies and other risk assets to suffer significantly as a result of its seemingly endless strength.
Dollar Dominance Affects Crypto Market
As half of most cryptocurrency trading pairs are backed by USD due to being used as global reserve currency, when it strengthens the other side weakens too. Recent months have seen relief rally across asset class due to falling USD but if momentum turns down then bearish crossover on monthly chart could be seen soon enough.
MACD Signals Bearish Crossover
Momentum could prove too heavy for dollar to defend against according to MACD which suggests that bearish crossover on one month chart may soon be confirmed. This is especially concerning for Bitcoin, Ethereum and rest of crypto market as bullish DXY led to recent crypto winter previously.
Bearish Crossover Could Lead To Crypto Continuation
DXY is weighted basket of USD trading against GBP, JPY etc and rebound can be seen on monthly chart which needs to be monitored closely by crypto market players as there might be further collapse if MACD divergence doesn’t confirm bearish crossover at end of month.
Bitcoin Price Up 40% In 2023
Bitcoin has risen more than 40% this year while many cryptocurrencies have posted several hundred percent rallies which could all be lost if bearish DXY crossover comes into effect leading towards a continuation in crypto space instead.