Reason WHY Bitcoin and Alts are going Down (Where to find Support, Next play for the Bulls?!)
Bitcoin and the rest of the Alts are still on Bloodbath
Many are asking WHY this is happening?!!!
To answer WHY, one of the reason is the inverse correlation of Bitcoin to the DXY or the Dollar Index. Currently, the US Dollar is trying to breakout from the wedge pattern it forms since March last year. Though, it was rejected from the 91+ points region on its first attempt; it's on the bridge of breaking the odds one more time. The question now, is will it be able to continue this bullish move.
Dollar Index (Weekly Timeframe)
After forming a falling wedge (A Bullish Pattern), the Dollar Index is trying to breakout upward. Showing strength in short term.
Dollar Index (Hourly Timeframe)
Checking the fundamentals, we don't see any reason why this is happening. As we all knew, the Fed and the Central Bank are continuously printing unlimited fiat. One probable reason is, all other countries are doing the same. In comparison to the rest of the world, the Dollar might be stronger as it is still considered as the world global trade currency. In relation, and especially that the vaccine is still not fully distributed to the rest of the globe. Most people still prepared to have their cash ready, in the case of any major changes.
Bitcoin Vs. DXY
Nevertheless, we can still see a big possibility of rejection on the 91.5 Points in short term but if this will break the region, the next target is the 91.8-92 Points. Thus, Bitcoin and the rest of crypto might have bigger correction and may continuously go down.
Bitcoin Vs. DXY (Inverse Correlation)
The data shows, since March 2020 as the Dollar Index goes down, the Bitcoin price continuously run parabolic. As of the moment, we can clearly see as the DXY attempts to bounce back, Bitcoin is now on the process of a correction.
If Bitcoin will continue the downward trend, the next possible strong support we can see is the 40-42K region. So better brace for impact and ready those bags to catch the deep.
Bitcoin @ Weekly Timeframe
Currently, nothing major changes in the market. We are not seeing any major Red Alert that shows that the Bull Market already end, though the 21 MA on the Daily Timeframe is already broken, the Weekly 21 MA is still intact. 2021 will surely be the year to remember for Bitcoin and the rest of the Cryptocurrencies, its giving us all another chance to scale in before another major run. Make sure you explore the Psychology of Market Cycle.
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Disclaimer: I am not a professional financial advisor. In plain English, DYOR. This article is for educational purposes only. Kindly, make sure to do your own research.