An intriguing pattern has emerged in the cryptocurrency world that points to the potential for a significant price increase in October. This formation revolves around the United States Dollar Index DXY, which measures the dollar’s strength against six major global currencies. Historically, the inverse correlation between the crypto market and DXY often indicates upcoming bullish rallies.
The remarkable adventure of DXY
Crypto analyst TheCryptoMann recently highlighted a notable formation in DXY via a social media post. This unusual development involves DXY achieving its 12th consecutive green candle, a rare event that has caught the attention of the crypto community. Such a series has not been observed since 2014. Additionally, the results at that time pointed to significant upside for cryptocurrencies.
https://twitter.com/TheCryptoMann1/status/1709246905601966242
The importance of this formation lies in the inverse correlation between DXY and the cryptocurrency market. Bitcoin is often seen as an alternative to the US dollar. Therefore, these two entities often compete for attention and value. When DXY shows strength, the crypto market tends to show weakness. The opposite also happens. TheCryptoMann points to a situation during the last such event in 2014, when DXY fell 8%. Accordingly, he explains that digital currencies have started an impressive rally. The total value of the Bitcoin market increases from $5.4 billion to over $8.2 billion. Accordingly, it indicates a significant increase in price of more than 50%.
Bullish outlook for cryptocurrencies
TheCryptoMann predicts that a similar scenario will emerge in the current market. It suggests that the upcoming correction in DXY will spark a crypto market surge echoing the events of 2014. In his words, “There is a clear inverse correlation between DXY and the Bitcoin market. So we will see some big price movements next month. That’s why all eyes will be on the market.”
Another analyst, Cryptoinsighuk, shares TheCryptoMann’s sentiment. He also believes a correction is imminent for DXY. The analyst cites external factors such as the ongoing SBF lawsuit and negative sentiment towards cryptocurrencies. On the other hand, this may indicate that the bottom is near for the market movement. If TheCryptoMann’s prediction proves true, the crypto market will be poised for a significant upward move. Such a rally would push total market capitalization from the current $1.065 trillion to over $1.5 trillion. On the other hand, when we look at it as cryptokoin.com, there is a possibility of a bullish outlook for the rest of 2023.
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