Once again, the Bitcoin price is rising to everyone’s greatest expectation, nearing $12,000. A massive new bull cycle is the next step. After holding the support level between $11,100-11,300, now it reaches a new resistance area between $11,900-12,200.
This upward event got triggered by the weakness in the dollar. Now, altcoins are selling off heavily, so another question pops into everyone’s mind - is the attention shifting back to Bitcoin?
The $12,000 weekly level is the crucial level to break
XBT/USD 1-week chart. Source: TradingView
The weekly chart above shows a massive crucial level for Bitcoin compared to the previous years. If the resistance area between $11,700-12,300 is going up, there will be a strong move toward $17,000 is likely to occur.
So, a breakthrough is imminent for a breakout upward would be the weakness of the U.S. Dollar. The U.S. Dollar took a massive crash in March 2020, which caused a surge in gold, silver, and Bitcoin prices.
DXY Index on the tipping point of further downwards momentum
U.S. Dollar Currency Index 1-day chart. Source: TradingView
A DXY indicator is a tool used to derive momentum on other “haven” assets like gold, silver, and Bitcoin. And in the definite crisis occurring on the markets, the run to cash and the dollar is expected.
As you can see in the chart, the DXY is weakening and the infinite QE provided by the FED, announcing trillions in new stimulus packages. Despite the weakness in the last period, Bitcoin continues to climb since the March crash. The same scenario is presented by the U.S. Dollar Currency Index, which rejects at 94.64 points in recent days and continues its freefall.
How Bitcoin influences altcoins?
BTC Dominance 1-day chart. Source: TradingView
The last Bitcoin up or down moves are having a negative influence on altcoins. These suggest that the market focus is around Bitcoin now. The flowing from altcoins into Bitcoin follows when Bitcoin goes up while altcoins are getting sold off. Any small move made by Bitcoin doesn’t show much strength.
Markets move in cycles, and the fourth quarter of the year is typically a terrible quarter for altcoin investors. The history over the years, the dominance chart of Bitcoin is moving up in that quarter and topping out in December.
Now everyone is looking forward to seeing Bitcoin’s market dominance surge upward from here, with altcoins selling off further. Critical indicators for the markets are interesting to study Bitcoin and the overall movements of the U.S. Dollar Currency Index.
What’s your scenario on the future markets these days.