The under-the-radar catalyst could secretly spark a huge long-term bitcoin rally, says crypto analyst Benjamin Cowen
Popular crypto analyst Benjamin Cowen says an overlooked catalyst could spark a major long-term rally for Bitcoin (BTC).
In a new strategy session, the analyst takes a look at the dollar index (DXY), which compares the US dollar with a basket of other major fiat currencies. In general, a weaker dollar can result in higher prices for many assets.
The analyst says one thing that could add additional bullish energy to Bitcoin is the DXY, which is starting a macro trend down. According to Cowen, the DXY may be on the verge of a bearish trend as its 100-week simple moving average (SMA) rejects it.
“Ideally, we would like this to go further and further down to really be the best terms for Bitcoin. That would be the best fit for Bitcoin and here’s the crazy thing about talking about the US Dollar Currency Index … Look at the actual macro area. ”
Cowen says DXY has been trading on a major descending channel for about 30 years. The crypto analyst points out that there is currently much more headroom at the bottom of the channel than at the top, which could indicate more downtrends for the dollar, and thus higher prices for Bitcoin.
He says that despite a rising DXY, BTC has still managed to maintain a long-term bullish structure for most of Bitcoin’s life. The analyst considers what could happen if the DXY finally entered a more pronounced downtrend.
“The dollar has more or less risen during this time. It has risen to the top, but there have been a couple of key times when the dollar was moving down and that was in line with the bitcoin bull markets.
Imagine what Bitcoin could do if the dollar ended up falling again … I think that would be incredibly bullish for Bitcoin. “
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