• The DXY Dollar Currency Index has climbed to its highest levels since the inception of Bitcoin, potentially threatening a bull market in cryptocurrencies.
• If the monthly MACD crosses bearish and confirms at the end of the month, it could cause bearish momentum to strengthen and create a dramatical decline in the dollar index.
• A bearish crossover in the DXY could mean continuation of recent crypto rallies.
The Impact Of The USD On Crypto
The US Dollar (USD) is one half of most cryptocurrency trading pairs due to its status as the global reserve currency. When the dollar is strong, other currencies weaken, which can have an effect on crypto assets. Recently, the DXY Dollar Currency Index has climbed to its highest levels since Bitcoin’s conception—threatening to derail crypto’s current bull market trend.
MACD Crossover Could Decide Fate Of Crypto
According to momentum indicators such as Moving Average Convergence Divergence (MACD), if a bearish crossover occurs at the end of this month then it could cause bearish momentum to strengthen and lead to a dramatic decline in the dollar index. This would mean continuation of recent crypto rallies—particularly for Bitcoin and Ethereum—which have already seen large gains this year.
Risk Assets At Risk Of Collapse
Cryptocurrencies are not alone in feeling threatened by a potential collapse in value caused by a strong US Dollar; other risk assets such as stocks and commodities may also be affected if there is no confirmation of a bearish MACD crossover at month-end.
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