The dollar (DXY) is showing weakness, bullish signal?

26 Jun 2023 · 1 min

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In this market commentary, the speaker argues that the current weakness in the US Dollar Index (DXY) serves as a bullish catalyst for Bitcoin. He explains that the DXY measures the strength of the US dollar, and because Bitcoin is priced in dollars, a stronger dollar typically depresses Bitcoin while a weaker dollar supports it. He points out that the DXY is in a pronounced downtrend, approaching a “discount zone” between the 0.618 and 0.705 Fibonacci‑derived levels, which market makers monitor as premium/discount thresholds. As the DXY moves lower into this zone, the speaker expects it to trigger further upside in Bitcoin.

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Just another thing to confirm the theory behind Bitcoin is the fact that the DXY is currently heading lower. The reason for that is simple. The DXY is called the US dollar index. This is basically denoting the strength of the US dollar. Bitcoin is valued against the US dollar. It makes sense that if the USD goes up, Bitcoin goes down. USD go down, Bitcoin goes up. And at the moment, the DXY is in a pretty strong downtrend with clear market structure looking to make new lows at around 0.618 to 0.705 level. This is called a discount zone. So this premium discount is what the market makers look at. So essentially at the moment, the DXY seems to be heading down to the 618 and the 705. So as the DXY heads lower, that is going to provide the catalyst that Bitcoin needs to go even higher.