Veteran analyst Peter Brandt shared a DXY chart showing the world’s leading currency breaking the pre-existing resistance. The analyst did not make any comments about DXY’s impact on the cryptocurrency market. However, traders expect massive pressure on Bitcoin and other cryptos on Monday.
Bitcoin to DXY correlation shows an unpleasant result!
Peter Brandt, who predicted Bitcoin’s steps accurately, shared the US Dollar Index (DXY) chart on his Twitter account. The veteran analyst stated that there was a major upside break in DXY. Peter Brand doesn’t say anything about Bitcoin. However, it is generally accepted that there is an inverse correlation between BTC and DXY.
Thanks to TradingView’s comparison tool, we can clearly see that there is an inverse correlation between Bitcoin and DXY. Wherever the US Dollar is showing strength in the market, Bitcoin tends to pull back from local tops and resistances.
The main reason behind such a trend is simple. Investors choose less volatile assets when the US currency is strong. Naturally, investors do not want to surrender themselves to risky assets like cryptocurrencies. Instead, they prefer slow and steady income from instruments like bonds.
Fed’s hawk takes shape
In the meantime, as you can follow on Kriptokoin.com, the Fed made an increase of 75 basis points. The US Dollar feels comfortable compared to the rest of the world’s currencies thanks to the latest rate hike and hikes approaching through 2023. In the future, we are more likely to see the currency steadily strengthen and a lack of entry into risky assets and markets.
According to institutional network streams last week, big investors are moving away from the cryptocurrency market. According to experts, the rally of the US Dollar in the market is effective in this. Investors took almost $500 million from the market after the sudden collapse of assets like Bitcoin and Ethereum.
Fortunately, institutional investors, large individual investors, and funds operating exclusively in the crypto market are still in the market. According to experts, it is possible for these to increase the price of digital gold even without the help of traditional institutions. This is why traditional institutions often become a minority of the purchasing power in the cryptocurrency market.
Bitcoin is trading at $19,218, down 0.36% on a daily basis, according to CoinMarketCap data at press time. However, the leading crypto has lost about 10% on a weekly basis and 35% on a monthly basis. Amid the current market crash, BTC is 72% off the ATH level of $69k.
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