Popular crypto strategist Kevin Svenson says one closely followed index that can indicate Bitcoin’s (BTC) market dominance is starting to flash a bottom signal.
In his crypto newsletter, Svenson says the US Dollar Index (DXY) is now behaving similarly to it did back in 2015, where it correlated to a Bitcoin bottom with sideways trading.
The trader says the US dollar is losing its momentum and breaking a parabolic trend, a possible signal Bitcoin will start to see key support at its current price level and trade sideways for a while instead of dipping to lower price levels. He also says that the FTX crypto collapse may continue to impact the crypto space and put downward pressure on Bitcoin’s price.
“We have a very important macro shift in the DXY happening. The US Dollar Index is repeating the same market structure that allowed BTC to bottom in 2015. It is unclear if the recent contagion will make a further impact on the market, but it is common for major players to ‘go bust [downtrend emoji]’ toward the end of a bear cycle.
There is potential for lower prices as these exchange collapses play out, but this is usually a sign we are nearing a cycle bottom. The US Dollar Index (DXY) breaking its parabolic trend is the main positive signal I see in the charts. This could allow BTC to gain support and start going sideways instead of straight down.”
At time of writing, Bitcoin is changing hands at $16,719.
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