Bitcoin Price Action vs. Fed Announcements & US Dollar Strength
Updated
This is an analysis of Bitcoin's price action before and after Fed announcements on the daily time frame and the affect the US Dollar index has had on the markets. Since Bitcoin hit its all-time high in November 2021, the growing strength of the US Dollar has put a relentless downward pressure on global markets and currencies (and Bitcoin/Dow Jones/Precious Metals were no exception).
Every time BTC dumped since the 69k high, it dumped hard. 50% from Dec-Jan and again in Apr-June. The months between then often ended where they started before the next fed announcement. Which leads us to the announcement tomorrow where the Fed is expected to raise rates 75bps (80-90%) up to 100bps (10-20%). This could cause the DXY to continue to rise and put further pressure on the markets sending them to new lows. However, I will say that Bitcoin has started to fight the inverse relationship it has had with DXY and I can see the bullish divergence forming. If this is a local top for the DXY, we should see a temporary opportunity for a relief bounce, but the key word should be temporary. As a result, I have taken a very defensive position either in USD searching for oversold conditions in which to make a short-term scalp.
Trade carefully friends!
Every time BTC dumped since the 69k high, it dumped hard. 50% from Dec-Jan and again in Apr-June. The months between then often ended where they started before the next fed announcement. Which leads us to the announcement tomorrow where the Fed is expected to raise rates 75bps (80-90%) up to 100bps (10-20%). This could cause the DXY to continue to rise and put further pressure on the markets sending them to new lows. However, I will say that Bitcoin has started to fight the inverse relationship it has had with DXY and I can see the bullish divergence forming. If this is a local top for the DXY, we should see a temporary opportunity for a relief bounce, but the key word should be temporary. As a result, I have taken a very defensive position either in USD searching for oversold conditions in which to make a short-term scalp.
Trade carefully friends!
Note
Note
Note
Not strong divergence, but Bitcoin is not falling as hard with DXY rises
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