Next hit a record high?As the U.S. dollar index drops to a 3-week low, Bitcoin holds $62,000

According to the classic technical setting called “rising wedge”, the dollar index (DXY) may continue to decline in the fourth quarter. The bearish outlook for the U.S. dollar may boost Bitcoin (Bitcoin) The price remained above US$62,000, a record high.

The dollar index is expected to fall again by 1.75%

A rising wedge is a bearish reversal pattern It is wider from the bottom, but shrinks as the price rises. As a result, the trading range is reduced, which makes the rebound unconvincing. This usually causes the price to break below the wedge-shaped support line and then fall to the maximum distance between the pattern’s trend line.

Since August, DXY has been forming a similar price structure. In addition, the index fell below the wedge-shaped support line this week, thus triggering a bearish setting, and it fell to 92.416, which is about 1.75% lower than the breakthrough level (about 93.98).

DXY daily price chart with rising wedge setting. Source: TradingView

A week ago, DXY hit a one-year high of 94.563, benefiting from concerns about stagflation and the Fed’s decision to lift interest rates $120 billion monthly asset purchase plan In November, next year is to raise interest rates next year.

But the index fell to a three-week low on October 19, highlighting that the currency market has digested The Fed’s reduction decisionInstead, their focus has shifted to normalization of policies elsewhere, including the United Kingdom, where analysts predict a 35 basis point increase in interest rates by the end of this year.

Bitcoin rises due to ETF FOMO

In addition to the optimism about Bitcoin, the price of Bitcoin this week was also supported by a weaker U.S. dollar The debut of the first exchange-traded fund (ETF) is linked to BTC futures on the New York Stock Exchange.

Bitcoin/USD It has risen by more than 40% so far this month It hit a five-month high of $62,987 on October 19. A slight correction followed, but Bitcoin held $62,000 as a temporary support for its weak sentiment against the U.S. dollar.

BTC/USD daily price chart with ascending channel mode. Source: TradingView

Technically, Bitcoin has reached the bullish depletion level of its current ascending channel range. As its Relative Strength Index (RSI) is also overbought, with a reading above 70 in the daily time frame, the cryptocurrency may undergo a mid-term price adjustment, with a short-term support target close to $60,000.

But in the long run, many analysts expect the price of Bitcoin to reach $100,000.

Tom Lee, co-founder of Fundstrat Global Advisors, Said In a report on October 18, Bitcoin futures-based ETFs will attract a total of more than US$50 billion in capital inflows in the first year, adding that BTC may rise to US$168,000 in response.

related: Since China’s “selfless” ban on Bitcoin mining, BTC prices have risen by 50%

Fidelity Investments global macro director Jurrien Timmer cited Metcalfe’s law to point out that by 2023, Bitcoin will become a six-figure asset, which measures the value of the network based on the growth rate of the network.

“Other technological innovations, even stocks like Apple-not to say I am a security analyst-have gone through the same process. Its sales have increased by 38 times in 10 to 20 years, and its market value has followed. Rose. 900 times more,” Timmer Tell Yahoo Finance, added:

“So this is an exponential growth. According to these indicators, by 2023, my model shows $100,000.”

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