Crypto: Watch the Dollar

Louis Sykes
May 23, 2022

From the desk of Louis Sykes @haumicharts

We've talked at length about the correlations between macro markets and Bitcoin.

A critical element underlying our crypto thesis is heavily driven by how price action is trading alongside equity markets.

In the case of the US dollar, it's the exact same, but the opposite.

Recently, there's been a notable negative correlation between Bitcoin and the dollar.

You can also see it on an intra-basis, they're pretty much trading in lockstep with each other.

As much as it is unlike the crypto crowd to be watching slow-moving macro markets like the foreign exchange, the dollar will provide some big clues for recovery out of this sell-down.

If this breakout in the US dollar fails, we have a serious tailwind behind the backs of risk assets, Bitcoin and cryptocurrencies included.

If the US Dollar Index $DXY is below 103, that's a heavy feather in the cap of crypto bulls right now.

Even if you're only in the business of slinging cryptocurrencies, be sure to watch the DXY in these coming weeks.

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Thanks for reading, and please let us know if you have any questions!

Allstarcharts Team

 

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