Bitcoin in bad shape? The price of a barrel of oil is not the only thing to watch in the context of the conflict against Iran. Indeed, the strength of the US dollar (DXY) also remains an important indicator to take into account. Because its inverse correlation with Bitcoin (BTC) could well bring back the king of cryptos to new lowsaccording to some analysts. Especially if the situation in the Middle East drags on.
- The price of Bitcoin is potentially threatened by the rise in the US dollar observed since the start of the conflict against Iran.
- The index of US Dollar Index (DXY) appears close to exiting its accumulation phase, which could lead to a decline in the stock and crypto markets.
The American dollar (DXY) is clearly rising: will it exit its accumulation zone at the top?
The geopolitical and military confrontation between the Israeli-American coalition and Iran continues to bring forte volatilité in global financial markets. And the cryptocurrency market is no exception to the rule, even if it has shown a certain resilience, especially when we compare the prices of Bitcoin and gold.
But the recent renewed strength of dollar américain could pull down the crypto-asset market a little further. Because, as the BitBull analyst points out on US Dollar Index (DXY) – which measures the value of the dollar against a basket of six major currencies (euro, yen, pound sterling, Canadian dollar, Swedish krona and Swiss franc) – seems close to exiting its accumulation phase at the top (see graph below).
“The DXY resembles a classic downtrend, with an accumulation and expansion phase.
The downtrend has occurred.
The buildup is underway.
The next [phase] will be the expansion, which will send cryptos and stocks to new lows.”BitBull
Bitcoin: towards new lows in the face of the strength of the dollar?
Historically, a rise in the dollar leads to a decrease assets “risk-on“, such as stocks and cryptocurrencies. Especially since other analysts, like Keith Alan on bear flagwhich is a pattern of bearish continuation.
“(…) directional dynamics [de Bitcoin] has not yet been established. (…) Structurally, BTC price action remains almost identical to the previous structure of bear flag (bearish flag). There is no indication that it should continue to imitate this price behavior, but I am following it as a road map until the price deviates from this path.”
Keith Alan
While the markets were hoping a de-escalation of the conflict between the United States and Iranthe latest massive wave of US strikes seems to indicate the opposite. With the addition of a rising US dollar, the outlook for Bitcoin therefore remains more than uncertain at present. The end or prolongation of the conflict in the Middle East will remain at the center of market fluctuations.
