Crypto analyst Benjamin Cowen posted a new video on his YouTube channel on December 10. He analyzed several charts that showed the sharp fall in the DXY, the US dollar index, observed in recent weeks. This index has fallen more than 8% from its peak of 114.77, which it reached this year. For Cowen, this significant drop may not match well with what bitcoin (BTC) traders are thinking.
Bitcoin Bullish Luck Shouldn’t Get Too Early
Most traders in the crypto market pay attention to the movements of the US dollar index. Often, when the DXY is falling, it means that investors are exchanging their dollars for risky assets like cryptos. Likewise, a rise in the index indicates a liquidation of risky assets in favor of the US dollar.
Crypto analyst Benjamin Cowen summed it up nicely. He said : “Historically, there is an inverse correlation between Bitcoin and DXY“. However, he said:We have already seen the inverse correlation between the DXY and risky assets coming out of periods of high inflation.“. Against this background, the crypto analyst urged Bitcoin traders not to declare victory too early.
Benjamin Cowen said:Before you ring the bell of victory at the end of the rise in the US dollar index, remember that if you had assumed that the rise of the dollar had also ended if you had assumed that similar pullbacks in history were coming to an end, the -disappointed you.s“.
The comparison with the recession of the 80s
Benjamin Cowen recalled that during the period of hyperinflation in the 1980s and the internet crash that led to a deep recession,”the dollar did not fall right after its initial peak“. First there was a fallfor a certain time‘, then the index is ‘gone up again“.
The analyst said that if things go as he imagines, “early next yearif not done yetyou would see the dollar at least start to move up and then figure out what to do from there“.
Crypto analyst Benjamin Cowen argues that it is very likely that the DXY is preparing for a great rally right now. He adds that the bearish trend could strengthen in the crypto market. This, once the upward trend of the DXY changes again.
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Far from dampening my enthusiasm, an unsuccessful investment in cryptocurrency in 2017 only increased my enthusiasm. So I decided to study and understand the blockchain and its many uses and share my pen knowledge related to this ecosystem.