Bitcoin has been highly correlated to gold as of late and also to the US dollar...
What is likely not news to many people, bitcoin has been trading very much in line with gold.
That has been the tendency for years now, bitcoin and gold have tended to be positively correlated. Meaning that when gold goes up bitcoin often does as well.
However, what may be a bit more surprising is bitcoin's relationship with the dollar.
Basically, how the dollar has traded, so goes bitcoin, especially recently.
That may be good news when looking at the current USD chart...
(Source: https://www.tradingview.com/x/FBh6KbZO/)
The above is a 4 hour USD chart and you can see that it is breaking down from the lows seen the other day.
From the upper left to the lower right...
The above chart is a very pretty chart to anyone that is short the dollar, or long bitcoin and stocks.
Basically as the dollar slides everything priced in dollars, goes up.
But in all honesty, it's not the above chart that gets me excited.
That chart is actually getting pretty close to oversold levels which means we could see a dead cat bounce in the not too distant future...
It's the longer term charts that get me really excited.
Check out the monthly USD chart:
(Source: https://www.tradingview.com/x/vAQZEB7p/)
While I don't have any technical indicators up on this chart, you can see that is has a lot more room to fall that perhaps was apparent on the shorter term charts.
Going back to 2011-2012, the dollar was roughly 25% LOWER than it is currently trading for right now, even after the big drop these past few months.
Given the latest announcements from the FED to let inflation run hotter than 2%, combined with a the potential for more stimulus, combined with a systemically weak economy and I think we could see the dollar drift back down towards those levels.
And if we get the dollar back down around those levels I think it's reasonable to assume that bitcoin will be much higher.
I'm not the only one thinking that...
It appears I am not the only one thinking these things.
Max Keiser tweeted today that with the dollar breaking support we are likely to see bitcoin, gold, and silver see renewed strength in the near term.
In fact, he says they will reach all time highs in the near term...
(Source: ~~~ embed:1300424265133629440) twitter metadata:bWF4a2Vpc2VyfHxodHRwczovL3R3aXR0ZXIuY29tL21heGtlaXNlci9zdGF0dXMvMTMwMDQyNDI2NTEzMzYyOTQ0MCl8 ~~~
I won't go as far as to say we will see new all time highs in the near term, but I do think we should break our short term highs.
Plus, I am on the record of saying that bitcoin will hit $20k before this year ends, so perhaps I am not too far off Max's line of thinking as I thought...
Either way, a weakening dollar is good news for bitcoin and crypto.
Stay informed my friends.
-Doc
Posted Using LeoFinance
These things gives a seasoned trader the win for most of their trades, how much happier one could get? @jrcornel :D
The dollar weakens and bitcoin rises, right on que.
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mememe
I will :D
Right on que, weakening dollar and surging bitcoin...
On a side note it is very sad that people get so excited about the dollar value of their Bitcoin going up even though theoretically it hasn't gained any actual purchasing power :D
lol
Like Kenny Rogers taught us in The Gambler, the best we can hope for is to break-even and to die in our sleep. :)
Why is that?