U.S. dollar.

Price analysis 12/18: SPX, DXY, BTC, ETH, BNB, XRP, SOL, ADA, AVAX, DOGE

Bitcoin may remain under pressure for a few days, but a collapse is unlikely, as traders are expected to buy the dips in anticipation of a spot Bitcoin ETF.

The S&P 500 Index (SPX) rose 2.49% last week, extending its string of weekly gains to seven weeks, the longest such winning streak since 2017. However, Bitcoin (BTC) could not maintain its momentum and succumbed to profit-booking by the bulls. Trading resource Material Indicators said in an X (formerly Twitter) post that “ year-end profit taking and tax loss harvesting” will prevail in the short term.

However, a crash is unlikely because several analysts expect the United States Securities and Exchange Commission to approve one or more spot Bitcoin exchange-traded fund (ETF) applications in January. If that happens, it could prove to be a game-changer for the sector.

VanEck CEO Jan van Eck said in an interview with CNBC that Bitcoin is likely to hit a new all-time high in the next 12 months. He expects Bitcoin to become an accompaniment to gold.

Price analysis 12/11: SPX, DXY, BTC, ETH, BNB, XRP, SOL, ADA, DOGE, AVAX

Bitcoin’s sharp correction surprised investors, but is it a sign that further downside is in store?

Bitcoin (BTC) closed last week with gains of 9.55%, but started the new week on a weak note, falling near $40,500. The sharp correction in Bitcoin also caused liquidations in several altcoins. According to CoinGlass data, cross-crypto long liquidations for Dec. 11 were more than $300 million.

The sharp fall does not change the trend in Bitcoin and altcoins, as corrections are a part and parcel of any uptrend. Generally, vertical rallies are followed by sharp pullbacks, which shake out the weaker hands and allow long-term investors to buy more at lower levels.

The corrections are unlikely to stretch longer due to several bullish catalysts in 2024. Analysts expect one or more Bitcoin exchange-traded funds to receive regulatory approval in January, which could be a game changer. That will be followed by Bitcoin halving in April, and finally, expectations of a rate cut by the United States Federal Reserve could boost risky assets. Goldman Sachs anticipates the Fed to start cutting rates in the third quarter of 2024.

Price analysis 12/4: SPX, DXY, BTC, ETH, BNB, XRP, SOL, ADA, DOGE, LINK

Altcoins show compelling technical setups after Bitcoin price blew past $42,000 on December 4.

Bitcoin (BTC) and Ether (ETH) surged above their respective overhead resistance levels on Dec.

Cryptocurrency exchange Bybit said in its 4th quarter report that institutional traders held 35% of their assets in Bitcoin, 15% in Ether and a large portion kept 45% of their assets are in stablecoins. Only a miniscule 5% was held in rest of the altcoins.

This shows that there is still enough firepower available with institutional investors to buy the cryptocurrency of their choice by selling stablecoins.

*Daily cryptocurrency market performance. Source:* *Coin360*

Matrixport research head Markus Thielen said in a recent note that the three previous crypto bear markets were followed by a three-year bull cycle, and this time is going to be no different, with 2023 being the first year.

Could bulls hold on to the gains in Bitcoin and select altcoins, or will higher levels attract aggressive selling by the bears? Let’s analyze the charts to find out.

S&P 500 Index price analysis

The bulls kicked the S&P 500 Index (SPX) above the overhead resistance of 4,541 on Nov.

*SPX daily chart. Source:* *TradingView*

The up-move is likely to face selling in the zone between 4,607 and 4,650.

Will Bitcoin break above $30K? New JOLTS data, weaker dollar boost chances

Bitcoin price is poised to reach $31,000 in April amid a lower vacancy turnout in the U.S., which risks crashing the dollar strength index to a yearly low.

On April 4, the U.S. Dollar Index (DXY), which measures the greenback’s performance versus a basket of six leading foreign currencies, dropped by 0.5% after demand for workers in the world’s largest economy declined.

BTC’s price eyes breakout with dollar at two-month lows

Bitcoin (BTC) has since grown 3.5% to around $28,800, continuing its extremely negative correlation with the dollar. The BTC/USD pair now eyes a breakout at $30,000, a psychological resistance level, due to hopes that the greenback will weaken further in 2023.

*DXY vs. BTC/USD year-to-date returns and correlation coefficient. Source: TradingView*

Meanwhile, the February Job Openings and Labor Turnover Survey (JOLTS) showed that the number of official job vacancies dropped below 10 million for the first time since May 2021.

In other words, while two jobs were available for each unemployed person at some point last year, there are now just 1.67.

*U.S. vacancies for each job seeker. Source: Bloomberg*

Interestingly, the implicit federal funds rate for January 2023 declined after the latest JOLTS data was published, in a similar fashion amid March’s bank failures.

The rate expectations are now around 4% compared to about 5% before the banking crisis, suggesting the market expects the Federal Reserve to stop, if not reverse, its interest rate hike program.

*Implicit federal funds rate drop after JOLTS data. Source: Bloomberg*

Worth noting is that the JOLTS readings are backward-looking, meaning the latest data does not include March’s sudden wave of bank failures and well-publicized layoffs at McDonald’s, Walmart and across technology companies, including Amazon and Apple.

Thus, the market is likely to see even worse JOLTS data in the next few months. This may also line up with the next Federal Open Market Committee meeting in May, prompting a dovish response, as a Reuters poll of forex strategists anticipates.

Lower rates should pressure the dollar downward and, in turn, Bitcoin higher, as long as their traditionally inverse price correlation remains.

Dollar $DXY looks fundamentally worse and worse for each year that goes by. Last #crypto bull run we didn’t really have a proper narrative, but for the next we will. Everything is alligning for a monster run after 2023

— Mac (@MacnBTC) April 3, 2023

Bitcoin’s price painting bullish continuation pattern

From a technical perspective, Bitcoin’s price eyes an extended price rally in April as it paints an ascending triangle pattern.

An ascending triangle is a bullish continuation pattern that appears when the price trends between a horizontal trendline resistance and a rising trendline support.

It completes when the price breaks out of the triangle in the direction of the previous trend and rises by as much as the triangle’s maximum height.

*BTC/USD daily price chart featuring ascending triangle breakout setup. Source: TradingView*

Applying the scenario on the ongoing BTC price trend brings $31,000 as its next upside target, up around 8.5% from current price levels.

Meanwhile, the DXY has the potential to drop by another 1% in April to test the lower range of its long-standing support channel (purple) at around 100.86.

*DXY daily price chart. Source: TradingView*

The lower rate scenario risks pushing DXY below the support channel to a new yearly low, with some analysts anticipating a drop toward 95.

Ultimately, such a scenario will likely mean another leg-up for the cryptocurrency markets and a potential $35,000 target for Bitcoin in Q2.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Fiat is in ‘jeopardy’ but Bitcoin, stablecoins aren’t the answer either: Ray Dalio

The hedge fund manager instead wants to see an “inflation-linked coin” be brought to the masses which would serve to ensure consumers secure their buying power.

Billionaire investor Ray Dalio has described fiat currency as being in serious “jeopardy” as an effective store of wealth but doesn’t believe Bitcoin (BTC) and stablecoins will be the solution either.

The founder of hedge fund firm Bridgewater Associates explained on CNBC’s Squawk Box on Feb. 2 that the mass money printing of the United States dollar and other reserve currencies has him questioning whether they are forms of “effective money.”

“We are in a world in which money as we know it is in jeopardy. We are printing too much, and it’s not just the United States, it is all the reserve currencies.”

However, Dalio was quick to add his thoughts on whether Bitcoin was a potential solution, acknowledging that despite what it has accomplished in “12 years,” it is still too volatile to serve as money:

“It’s not going to be an effective money. It’s not an effective store holder of wealth. It’s not an effective medium of exchange,” he argued.

He also dismissed stablecoins as an effective form of money, as they are replica of state-backed fiat currency.

Instead, Dalio proposed the creation of an “inflation-linked coin” that would serve to ensure consumers secure their buying power.

“The closest thing to that is an inflation index bond, but if you created a coin that says OK this is buying power that I know I can save in and put my money in over a period of time and transact in anywhere, I think that would be a good coin,” he said.

“#Bitcoin has no relation to anything. It’s a tiny thing that gets disproportionate attention,” says @RayDalio on #crypto. “The value of $BTC is less than 1/3 of $MSFT stock. It’s not an effective store of wealth. But we are in a world where money as we know it is in jeopardy.” pic.twitter.com/Cc7o2TwkxG

— Squawk Box (@SquawkCNBC) February 2, 2023

“So I think you’re going to see the development of coins that you haven’t seen that probably will end up being attractive, viable coins. I don’t think Bitcoin is it,” he added.

However, not everyone agreed with Dalio’s take on Bitcoin and the viability of an inflation-linked coin.

Digital asset manager Eric Weiss of Bitcoin for Family Officers was one, telling his 38,300 Twitter followers that such a coin could not exist:

“According to Ray, [Bitcoin] is very close to being the solution to the world’s problems but it’s too volatile. He’s waiting for and vaguely describes a solution that doesn’t and can’t exist,” said Weiss.

ARK Invest CEO Cathie Wood also had a different view of Bitcoin, referring to it as a defense against wealth confiscation in parts of the developing world:

“I’m struck that the market is now leading the Fed,” @ARKinvest Founder @CathieDWood says on bond market downtrends.https://t.co/DDNw4dbOPD pic.twitter.com/AAS0UWf0kh

— Yahoo Finance (@YahooFinance) February 2, 2023

“Those populations need a fallback, an insurance policy like Bitcoin,” she said.

Dalio’s latest views on Bitcoin come despite once having labeled it “one hell of an invention” that could serve as a viable inflation hedge. However, these remarks were made on Jan. 28, 2021 — before the current bear market took effect.

The billionaire investor has also previously recommended BTC should make up 1-2% of an investors portfolio on Jan. 6, 2022.

As an investment product, the hedge fund manager said back in May 2021 that he would rather buy BTC over bonds but stated a few months later that he still prefers gold.

On Oct. 4, Dalio stepped down as Bridgewater’s co-chief investment officer, but he remained on board as a mentor.

Bitcoin could see $25K by March 2023 as US dollar prints ‘death cross’ — Analysis

Bitcoin’s price recovery in 2023 has witnessed minimal institutional buying, casting doubt on whether BTC will rally beyond $25,000.

Bitcoin (BTC) shows the potential of stretching its ongoing price recovery to $25,000 by March, based on a mix of bullish technical and macro indicators.

Bitcoin price exits descending channel range

First, Bitcoin’s potential to hit $25,000 comes from its exit from a prevailing descending channel range.

A bull run or bull trap?

— Cointelegraph (@Cointelegraph) January 16, 2023

Notably, BTC’s price broke out of the range late last week, accompanying a rise in its trading volumes. The cryptocurrency’s move upside also pushed the price above its resistance confluence, comprising a psychological price ceiling of $20,000 and its 20-week exponential moving average (20-week EMA; the green wave) near $19,500, as shown below.

*BTC/USD 1-week candle chart (Coinbase). Source: TradingView.com*

Breaking three resistance levels with strong volumes shows traders’ conviction about an extended price rally. Should it happen, Bitcoin’s next upside target appears at its 200-week EMA (the yellow wave) at around $25,000 — a 20% rise from current price levels.

Dollar forms a “death cross”

Bitcoin’s bullish technical outlook appears against the backdrop of a relatively weaker U.S. dollar, which is down due to expectations that the Federal Reserve will stop raising interest rates as a result of lowering inflation.

The two assets have mostly moved inversely to each another since March 2020. As of Jan. 16, the daily correlation coefficient between Bitcoin and the U.S. Dollar Index (DXY), a barometer to gauge the greenback’s strength versus top rivaling currencies, was -0.83, according to TradingView.

*BTC/USD and DXY correlation coefficient. Source: TradingView*

A traditional technical setup sees more losses for the dollar ahead.

Dubbed a “death cross,” the setup appears when an asset’s 50-period moving average crosses below its 200-period moving average. For the dollar, the death cross shows its weakening momentum, meaning its short-term trend has been underperforming its long-term direction.

“Expecting more downside in the mid to long term,” independent market analyst Crypto Ed said about the dollar, adding:

“Risk on assets should bounce more on that. Or better said: I expect BTC to break its bearish cycle as the big run in DXY is finito.”

Not a long-term Bitcoin price rally

Bitcoin has risen 30% above $20,000 in 2023 so far, but on-chain data shows that the buying trend lacks support from institutional investors.

For instance, the total amount of Bitcoin held by digital assets holdings such as trusts, exchange-traded funds and other funds has been declining during the coin’s price increase in recent months, according to CryptoQuant’s Fund Holdings index.

*Bitcoin fund holdings. Source: CryptoQuant*

In addition, no unusual transactions occurred on-chain but on crypto exchanges, per the comparisons made between CryptoQuant’s Token Transferred and Fund Flow Ratio metrics.

*BTC/USD versus Token Transferred (orange) and Fund Flow Ratio (blue). Source: CryptoQuant*

The Token Transferred metric shows the number of coins transferred in a specific timeframe, while the Fund Flow Ratio represents the ratio of coin transfers involving the exchange to the overall coin transfers networkwide.

“Usually at the bottom, institutional investors want to buy quietly through OTC trading,” noted market analyst MAC_D, adding:

“This trading was simply actively traded only on the exchange, and no unusual transactions occurred on the on-chain. […] The current institutional investors have remained calm and just watching. OTC trading will be brisk when they expect a full-fledged uptrend turn.”

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Bitcoin ‘bear flag’ breakdown targets $15K as US dollar hits 20-year high

BTC is losing its safe haven status to the dollar, with mutual funds increasing their cash holdings by $208 billion in the first half of 2022.

On Sept. 6, Bitcoin (BTC) price crumbled below $20,000 and the asset looks ready to undergo further decline in September due to a strong U.S. dollar and an ominous technical analysis pattern.

Bitcoin eyes $15,000 next

From a technical perspective, Bitcoin risks dropping to $15,000 or below in the coming weeks after breaking out of its prevailing “bear flag” pattern.

For the unversed, bear flags form when the price consolidates higher inside a parallel, ascending range after a strong downtrend. They typically resolve after the price breaks below the lower trendline and falls by as much as the previous downtrend’s length.

*BTC/USD daily price chart featuring ‘bull flag’ pattern. Source: TradingView*

Bitcoin has entered the so-called breakdown stage of its bear flag pattern, with its downside target lurking south of $15,000, as illustrated in the chart above.

Cash is king

The prospects of a weaker Bitcoin heading further into 2022 are growing mainly because of a worsening economic backdrop.

Bitcoin’s 60% year-to-date price decline is one of the unfortunate consequences of the Federal Reserve’s hawkish policy to bring inflation down to 2% from its current 8.5% level. In detail, the U.S. central bank has raised its benchmark rates to the 2.25%–2.5% range via four consecutive hikes in 2022.

The hikes have boosted the appetite for cash-based securities over riskier assets like Bitcoin.

For instance, U.S. banks with savings accounts offer clients an annual percentage yield of 2% or more from around 0.5% at the start of this year, BankRate.com data shows.

Meanwhile, a Goldman Sachs analysis shows that mutual funds with $2.7 trillion in equity under management have increased their cash holdings by $208 billion in the first half of 2022, the fastest allocation rate to date.

*Mutual funds asset rotations noted in HY1/2022. Source: Goldman Sachs*

The broader demand for cash has helped the U.S. dollar index, which measures the greenback’s strength against a pool of top foreign currencies, climb to 110.55 on Sept. 6, its highest level since 2002.

As a result, cash has drastically outperformed stocks, Bitcoin, Ethereum, copper, lumber and other assets in 2022.

This trend may continue, given that the Federal Reserve plans to continue its rate-hiking spree, according to Jerome Powell’s statements at the recent Jackson Hole symposium.

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

USD stablecoin premiums surge in Argentina following economy minister’s resignation

Argentina has been in a long-standing battle against rising inflation and a continued decline of the peso against the U.S. dollar.

Argentina, a country with one of the highest crypto adoption rates in the world, saw the price of United States dollar-pegged stablecoins surge across exchanges on Saturday after the abrupt resignation of its Economy Minister, Martin Guzman.

The minister’s shock exit, confirmed on his Twitter account on Sunday via a seven-page letter, threatens to further destabilize a struggling economy battling high inflation and a depreciating national currency.

According to data from Criptoya, the cost of buying Tether (USDT) using Argentinian pesos (ARS) is currently 271.4 ARS through the Binance exchange, which is around a 12% premium from before the resignation announcement, and a 116.25% premium compared to the current fiat exchange rate of USD/ARS.

The local crypto price tracking website has also revealed a similar jump in other USD-pegged stablecoins, including Dai (DAI), Binance USD (BUSD), Pax Dollar (USDP) and Dollar on Chain (DOC).

Argentineans have been piling into crypto as a means to hedge against the country’s rising inflation and a continued fall of the Argentinean peso against the USD.

In 2016, before inflation really took its toll, one USD was only able to buy around 14.72 Argentinean pesos. However, six years later, one USD is able to buy as many as 125.5 ARS.

The extra premium on U.S.-dollar pegged stablecoins is the result of a law passed on September 1, 2019, called Decree No. 609/2019, and has made it virtually impossible for Argentinians to exchange more than $200 in greenbacks per month at the official exchange rate.

It was imposed as a means to prevent the Argentinean peso from free-falling amid a struggling economy. In May, the Argentinean annual inflation rate accelerated for the fourth straight month, hitting 60.7%, according to Trading Economics.

The South American nation has the sixth-highest adoption rate globally, with around 21% of Argentineans estimated to have used or owned crypto by 2021, according to Statista.

In May, Cointelegraph reported that “crypto penetration” in Argentina had reached 12%, double that of Peru, Mexico, and other countries in the region, primarily driven by citizens seeking safe haven against rising inflation.

In addition to Bitcoin, Argentineans have been turning to stablecoins increasingly as a means of storing value in the United States dollar.

Bitcoin’s inverse correlation with US dollar hits 17-month highs — what’s next for BTC?

Market pundits anticipate the dollar rally to either stall or correct by the end of 2022, benefiting Bitcoin.

Bitcoin (BTC) has been moving in the opposite direction of the United States dollar since the beginning of 2022 — and now that inverse relationship is more extreme than ever.

Bitcoin and the dollar go in opposite ways

Notably, the weekly correlation coefficient between BTC and USD dropped to 0.77 below zero in the week ending July 3, its lowest in seventeen months.

Meanwhile, Bitcoin’s correlation with the tech-heavy Nasdaq Composite reached 0.78 above zero in the same weekly session, data from TradingView shows.

*BTC/USD and U.S. dollar correlation coefficient. Source: TradingView*

That is primarily because of these markets’ year-to-date performances amid the fears of recession , led by the Federal Reserve’s benchmark rate hikes to curb rising inflation. Bitcoin, for example, has lost over 60% in 2022, while Nasdaq’s returns in the same period stand around minus 29.72%.

On the other hand, USD has excelled, with its U.S. dollar index (DXY) — a metric that measures its strength against a basket of top foreign currencies — hovering around its January 2003 highs of 105.78.

*BTC/USD vs. DXY vs. NDAQ weekly price chart. Source: TradingView*

Will dollar rise further?

The Fed appears compelled to increase benchmark rates based on how traders have priced the front-end derivative contracts.

Notably, traders anticipate the Fed to raise the rates by 75 basis points (bps) in July. They also bet Fed won’t raise rates beyond 3.3% by this year’s end from the current 1.25%-1.5% range.

However, a push to 3.4% by the first quarter of 2023 could have the central bank dial back its aggressive tightening.

That could result in a 50 basis point cut by the end of next year, as shown in the chart below.

*Changes in Fed’s interest rate target. Source: TradingView*

An early rate cut could happen if the inflation data cools down, thus limiting investors’ appetite for the dollar, according to Wall Street analysts surveyed by JPMorgan. Notably, around 40% see the dollar ending 2022 at its current price levels — around 105.

Meanwhile, another 36% bet that the greenback would correct ahead of the year’s close.

“Foreign exchange is not a linear world. At some point, things flip,” noted Ugo Lancioni, head of global currency at Neuberger Berman, adding:

“I personally have a bias to short the dollar at some point.”

Bitcoin to bottom out in 2022?

In addition, the dollar’s ability to continue its rally for the rest of 2022 could be hampered by a classic technical pattern.

First spotted by independent market analyst Agres, the DXY’s double top pattern is partially confirmed due to its two consecutive highs and a common support level of 103.81.

As a rule of technical analysis, the double top pattern could resolve when the price breaks below the support and falls by as much as the structure’s maximum height, as shown in the chart below.

As a result, DXY’s double top profit target comes to be near 101.8, down over 3.25% from the price of July 3.

“The dollar is extremely overbought and overheated,” explained Agres, adding that its correction in the coming sessions could benefit stocks and cryptocurrencies:

“Finally, looking like it [DXY] will topple down hard. In perfect confluence for a melt-up scenario. When [the] dollar goes down, stocks and crypto rally.”

Meanwhile, Bitcoin’s “MVRV-Z Score” has also fallen into a range that has historically preceded sharp, long-term upside retracement. This on-chain indicator predicts that Bitcoin could bottom at around $15,600 in 2022.

Bitcoin’s inverse correlation with US dollar hits 17-month highs — what’s next for BTC?

Market pundits anticipate the dollar rally to either stall or correct by the end of 2022, benefiting Bitcoin.

Bitcoin (BTC) has been moving in the opposite direction of the U.S. dollar since the beginning of 2022 — and now that inverse relationship is more extreme than ever.

Bitcoin and the dollar go in opposite ways

Notably, the weekly correlation coefficient between BTC and the dollar dropped to 0.77 below zero in the week ending July 3, its lowest in seventeen months.

Meanwhile, Bitcoin’s correlation with the tech-heavy Nasdaq Composite reached 0.78 above zero in the same weekly session, data from TradingView shows.

That is primarily because of these markets’ year-to-date performances amid the fears of recession, led by the Federal Reserve’s benchmark rate hikes to curb rising inflation. Bitcoin, for example, has lost over 60% in 2022, while Nasdaq’s returns in the same period stand around minus 29.72%.

On the other hand, the dollar has excelled, with its U.S. dollar index (DXY), a metric that measures its strength against a basket of top foreign currencies, hovering around its January 2003 highs of 105.78.

Will dollar rise further?

The Fed appears compelled to increase benchmark rates based on how traders have priced the front-end derivative contracts.

Notably, traders anticipate the Fed to raise the rates by 75 basis points (bps) in July. They also bet Fed won’t raise rates beyond 3.3% by this year’s end from the current 1.25%-1.5% range.

However, a push to 3.4% by the first quarter of 2023 could have the central bank dial back its aggressive tightening.

That could result in a 50 basis point cut by the end of next year, as shown in the chart below.

Meanwhile, another 36% bet that the greenback would correct ahead of the year’s close.

“Foreign exchange is not a linear world. At some point, things flip,” noted Ugo Lancioni, head of global currency at Neuberger Berman, adding:

“I personally have a bias to short the dollar at some point.”

Bitcoin to bottom out in 2022?

In addition, the dollar’s ability to continue its rally for the rest of 2022 could be hampered by a classic technical pattern.

First spotted by independent market analyst Agres, the DXY’s “double top” pattern is partially confirmed due to its two consecutive highs and a common support level of 103.81.

As a rule of technical analysis, the double top pattern could resolve when the price breaks below the support and falls by as much as the structure’s maximum height, as shown in the chart below.

As a result, DXY’s double top profit target comes to be near 101.8, down over 3.25% from today’s price.

“The dollar is extremely overbought and overheated,” explained Agres, adding that its correction in the coming sessions could benefit stocks and cryptocurrencies.

“Finally, looking like it [DXY] will topple down hard. In perfect confluence for a melt-up scenario. When [the] dollar goes down, stocks and crypto rally.”