Bitcoin (Bitcoin) October 1st is expected to regain USD 45,000, as the U.S. dollar fell after reaching a one-year high. In the past month, the close negative correlation between Bitcoin and the U.S. dollar indicates that a weaker U.S. dollar may push up BTC prices in the next few trading days.
U.S. dollar falls after labor market turmoil
Specifically, the U.S. dollar index (DXY), which measures the strength of the U.S. dollar against a basket of six foreign currencies (including the euro and the British pound), touched $94.50 on Thursday for the first time since September 28, 2020. However, due to the news of the increase, the number of initial jobless claims in the United States has fallen back against the forecast of the decline.
this Labor data released on Thursday It shows that the number of initial jobless claims last week rose to 362,000 from 351,000 a week ago and 333,000 predicted by economists. As a result, the number of reapplications remained at around 2.8 million for five consecutive weeks.
For the market, this may be news that the Fed may postpone Reduced its $120 billion asset purchase plan From November to next month, interest rates are kept low and the U.S. dollar temporarily strengthens again.
At the time of writing, the index is trading at 94.263.
The technical outlook predicts that Bitcoin will rise and the U.S. dollar will fall
The technical side also shows that the dollar is facing the prospect of future corrections. For example, the independent market analyst TradingShot spot The US dollar index is in the megaphone mode and is about to peak for correction in the next trading day, as shown in the chart below.
“Based on the one-dimensional Relative Strength Index (RSI), DXY seems to be right at the top of the pattern because [it was] August 15, 2018,” TradingShot wrote.
“DXY is building a powerful callback to the bottom of the amplifier.”
At the same time, the recent round of selling in the Bitcoin market has caused it to depict a falling wedge pattern. In detail, when prices fall within a channel composed of two different downward trend lines, a downward wedge will appear.
Traditional analysts regard the falling wedge pattern as a bullish reversal indicator, and point out that breaking its upper trend line will cause the price to rise to the maximum distance between the wedge trend line.
The maximum height of the structure is approximately USD 10,000.Therefore, the Bitcoin price can at least Retest $50,000 If the wedge breakout proceeds as expected.
A weaker U.S. dollar means a stronger Bitcoin
On the other hand, the impressive employment report may boost investor interest in Bitcoin in the medium term.
Vasja Zupan, President of Matrix Exchange, told Cointelegraph that the weakness and depreciation of the U.S. dollar will continue to cause investors to pour excess cash into the cryptocurrency market. He said:
“Bitcoin has the function of a comprehensive hedge against inflation in its core proposition, so sustained high inflation in the United States will only push it up. Therefore, in the long run, the value of the U.S. dollar will continue to be lower than that of Bitcoin.
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