Historically Bitcion has massively outperformed Gold and Stocks. This chart shows that going back to 2015:
We have shown in previous blogs how and why Bitcoin is in a bull market trend which should last into the 4th qtr 2021 or later. The US Dollar index (DXY) is inversely tied to Bitcoin. By examining DXY charts we can see it has been lagging in 2020 due to stimulus and QE required to combat Covid 19 shutdowns globally. Will the DXY bounce and hurt the Bitcoin bull run? The DXY is always woth watching. The inverse correlation goes back years:
Overlaying global macro themes running in 2020, make us believe that the DXY will ride lower before a bounce back towards 100. The Fed is unlikely to slow down printing and QE in 2021, until maybe later in the year. The new administration coming in seems more willing than Trump was to add liquidity to the US market and print Dollars.
The chart below shows likely scenarios of where Bitcoin goes next week, depending on what the DXY does:
Bitcoin dumped two weeks ago and has consolidated ever since. We always try to educate and Bitcoin is volatile, in part, due to its inverse coorelation to the DXY. We believe Bitcoin has already stabilized with support at $18,000. So far it has held. It Bitcoin threatens $17.5K again it may break further down. Not to fear, a higher low than previous lows is still bullish. By early January or perhaps, later in January, Bitcoin will make it’s push to $20K. All we can do is wait. Appears Bitcoin is poised to really run up in 2021. Demand is all time highs, on and off right now. If BTC could close a day above $20K it would turn extremely bullish, very fast. We hope we have helped some of you! Neutral ATM is here to get everyone off of zero Bitcoin.
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