All-time highs next? Bitcoin holds $62K as the Dollar index tumbles to 3-week lows

The U.S. dollar index (DXY) could continue its slide in Q4, according to a classic technical setup known as a “rising wedge.” The greenback’s bearish prospects may boost Bitcoin’s (BTC) price to new all-time highs as it holds above $62,000.

DXY poised for another 1.75% drop

Rising wedges are bearish reversal patterns that begin wide at the bottom but contract as the price increases. As a result, the trading range narrows, which makes the rally unconvincing. That typically prompts the price to break below the wedge’s support line and later fall by as much as the maximum distance between the pattern’s trendlines.

The DXY has been forming a similar price structure since August. Moreover, the index’s decline this week had it break below the wedge’s support line, therefore triggering a bearish setup toward 92.416, down about 1.75% below the level of breakout (around 93.98).

DXY daily price chart featuring rising wedge setup. Source: TradingView

A week ago, DXY reached a one-year high of 94.563, reaping the benefits of stagflation fears and the Federal Reserve’s decision to unwind its $120-billion-a-month asset purchase program in November, followed by interest rate increases next year.

But the index dropped to a three-week low on Oct. 19, underscoring that money markets have priced in the Fed’s tapering decision. Instead, their focus has shifted toward policy normalization elsewhere, including the United Kingdom, where analysts have forecasted rate hikes worth 35 basis points by the end of this year.

Bitcoin rallies on ETF FOMO

Bitcoin price found support from the weaker dollar this week, in addition to optimism about the debut of the first exchange-traded fund (ETF) tied to BTC futures on the New York Stock Exchange.

BTC/USD has rallied by over 40% month-to-date to hit a five-month high of $62,987 on Oct. 19. A minor correction ensued, but Bitcoin held $62,000 as its interim support against a weakening dollar sentiment. 

BTC/USD daily price chart featuring ascending channel pattern. Source: TradingView

Technically, Bitcoin reached the bullish exhaustion level of its prevailing ascending channel range. With its relative strength index (RSI) also overbought with a reading above 70 on the daily timeframe, the cryptocurrency could undergo an interim price correction with a short-term support target near $60,000.

But long term, multiple analysts anticipate Bitcoin’s price to hit $100,000.

Tom Lee, co-founder of Fundstrat Global Advisors, said in a note on Oct. 18 that ETFs based on Bitcoin futures would together attract more than $50 billion in inflows in the first year, adding that BTC could conceivably rise to $168,000 in response.

Related: BTC price is up 50% since China ‘selflessly’ banned Bitcoin mining

Jurrien Timmer, director of global macro at Fidelity Investments, noted that Bitcoin would become a six-figure asset by 2023, citing Metcalfe’s law, which measures a network’s value based on its growth rate.

“Other technology innovations, and even, like, a stock like Apple — not that I’m a security analyst — has gone through that same process, where its sales go up 38-fold over 10, 20 years, and its market value goes up by 900-fold,” Timmer


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Bitcoin price eyes $50K as the US Dollar retreats after hitting its one-year high

Bitcoin (BTC) looks to reclaim $45,000 on Oct. 1 as the U.S dollar retreated lower after hitting its one-year high. Bitcoin’s tight inverse correlation with the greenback over the past month suggests that a weakening dollar could push BTC price even higher in the coming sessions. 

Bitcoin-dollar correlation on hourly chart. Source:

Dollar drops following labor market shock

In detail, the U.S. Dollar Index (DXY), which measures the greenback’s strength against a basket of six foreign currencies, including euro and sterling, hit $94.50 Thursday for the first time since Sept. 28, 2020. But it retreated on news of rising U.S. jobless claims against the forecasts of a decline.

The labor data released Thursday showed that the number of jobless claims rose to 362,000 last week against 351,000 a week earlier and against the economists’ projection of 333,000. As a result, the number of reapplications got stuck around 2.8 million for five weeks in a row.

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For the markets, this could be the news that the Federal Reserve might delay tapering its $120 billion asset purchasing program from November to a later month, thus keeping interest rates lower and the dollar’s renewed strength temporary.

DXY daily price chart. Source:

The index was trading at 94.263 at the time of this writing.

Technical outlook projects Bitcoin higher, dollar lower

Technicals also showed the greenback facing the prospect of a correction ahead. For example, independent market analyst TradingShot spotted the dollar index inside a Megaphone pattern, about to get topped out to pursue a correction in the coming sessions, as shown in the chart below.

US dollar index daily price chart featuring Megaphone technical setup. Source: TradingShot,

“Based on the 1D relative strength index (RSI), it appears that DXY is right at the top of the formation as [it was] on Aug 15, 2018,” TradingShot wrote.

“DXY is building up a strong pull-back to the bottom of the Megaphone.”

Meanwhile, a recent bout of selling in the Bitcoin market lately had it paint a Falling Wedge pattern. In detail, Falling Wedges appear when the price trends lower inside a channel comprising of two diverging, descending trendlines.

Traditional analysts see the Falling Wedge pattern as a bullish reversal indicator, noting that a break above its upper trendline moves the price higher by as much as the maximum distance between the Wedge’s trendlines.

BTC/USD daily price chart featuring falling wedge setup. Source:

The structure’s maximum height is roughly $10,000. As a result, the Bitcoin price can at least retest $50,000 should the Wedge breakout play out as intended.

A weaker dollar means stronger Bitcoin

On the other hand, the underwhelming jobs report could boost investors’ interim appetite for Bitcoin. 

Related: Bitcoin’s sharp fall from $50K linked to stronger US dollar, gold — Correlation shows

Vasja Zupan, president of Matrix Exchange, told Cointelegraph that the dollar’s weakness and devaluation against rising inflation would continue to make investors put their excess cash in crypto markets. He said:

“Bitcoin in its core proposition has an integrated hedge against inflation and therefore persistently higher inflation in the U.S. can only push it upwards. Therefore, in the long term, the dollar’s worth will continue to be lesser than Bitcoin.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.