Bitcoin price can continue to rise despite correlation with DXY

The first week of November for Bitcoin doesn’t match the 25% increase in the first week of October.

Although BTC is currently approaching $ 66,000, the sideways movement after reaching the ATH has left market participants skeptical of its development.

Bitcoin price chart | Source: Tradingview

While there doesn’t seem to be a specific reason for the recent consolidation, there are a number of factors that may have been steering this worrying trend.

DXY-BTC. Correlation

Interestingly, there is an inverse relationship between DXY and BTC’s trajectory.

The DXY is an index that tracks the performance of the US dollar, and in recent years BTC and DXY have shown a striking relationship – whenever DXY rises, the price of BTC falls and vice versa.

In fact, November’s DXY surge appears to be causing BTC price to consolidate.

However, even if the DXY rises, the price of BTC will remain stable. However, analyst BaroVirtual claims that since becoming dependent on DXY, BTC is at risk of deep correction.

In addition, on November 3rd, the Fed cut its bond purchases by $ 15 billion a month. This means that Treasuries will continue to appreciate along with DXY and “BTC may not meet the big goals, which may be limited to a range of $ 72 to $ 80,000”.

Source: CryptoQuant

So is the dream of $ 100,000 and $ 200,000 BTC just a dream? Well, it isn’t, and here’s why.

A higher level is guaranteed

First of all, analysts have long believed a retracement is an important step in the overall movement of BTC. In fact, a retest of $ 61,000 is considered important to the bullish story. In addition, the end-of-year target of $ 100,000 for Bitcoin is viewed by on-chain analyst PlanB as a “worst-case scenario” according to the stock-to-flow (S2F) model.

Plus, with the upcoming Taproot upgrade, it looks like “BTC has been closely following S2F”.

In addition, the amount of BTC reserves on the exchanges has decreased while miners’ reserves have increased. In addition, the accumulation and distribution indicator (A / D) marks an accumulation phase from 2020 with the same upward trend.

Source: CryptoQuant

So is there any chance that BTC will part ways with DXY and continue to rise? Well, if you look at the current picture, there’s a good chance that will happen. Especially at the time of going to press, the sideways movement already mentioned fell by the wayside.

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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

Mr. Teacher

According to ABMCrypto

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