Bitcoin
Bitcoin rises against USD after Mnuchin promises second stimulus check
Bitcoin (BTC) may see a price boost this week as the U.S. dollar currency index (DXY) weakens and one analyst tells American voters to buy.
Data showed DXY dropping for a fourth day on Oct. 1, as negotiations over a new coronavirus stimulus deal continued in Washington.
Vays: “Buy Bitcoin” no matter who wins the U.S. election
DXY and BTC/USD have demonstrated a strong inverse correlation in recent months. Recent DXY gains did not translate into intense selling pressure for Bitcoin, but fresh losses could yet buoy BTC bulls in the long term.
The U-turn in DXY’s fortunes comes as the United States Senate attempts to thrash out a new deal on coronavirus aid which could come with a $2.5 trillion price tag.
Speaking to FOX Business on Wednesday, Treasury Secretary Steven Mnuchin confirmed that talks were ongoing, but that any deal would include a fresh round of $1,200 stimulus checks for eligible U.S. citizens.
“The good news is we’ve reached an agreement that if there is a deal, there are direct payments similar to last time that are in the package,” he said.
Mnuchin was speaking a day after a heated debate between President Donald Trump and presidential hopeful Joe Biden.
As tensions flared, popular trader Tone Vays sought to get viewers’ attention online by arguing that no matter who takes over control of the White House, money printing, like that which finances stimulus packages, would continue to hurt the dollar.
“No matter who wins they will keep printing so BUY BITCOIN,” Vays wrote in a live chat as the debate aired.
U.S. dollar currency index 3-month chart. Source: TradingView
Bitcoin DXY correlation halts decline
The past days’ retreat has meanwhile begun to alter the correlation between DXY and Bitcoin, data reveals.
Compiled by analytics resource Digital Assets Data, a comparison of Bitcoin 90-day returns correlations to DXY, gold, VIX and the S&P 500 shows DXY bottoming out at the end of September.
Bitcoin 90-day returns correlations comparison. Source: Digital Assets Data
By contrast, BTC/USD remains highly correlated with both gold and the S&P 500 into October as the price of Bitcoin recorded its second-best quarter in history, closing the month above $10,600.
As Cointelegraph reported, however, not everyone believes that the situation will last; Bitcoin should soon break away from traditional markets altogether.
- Bitcoin has seen some mixed price action as of late, with bulls being unable to take control of its trend in the time following its rally up to $28,500
- The rejection here was quite intense, and it has yet to show any signs of strength in the time following this occurrence
- The fact that bulls have guarded against any deeper drawback is positive because it invalidates the possibility that this recent high is a blow-off top
- One trader is now noting that there is an incredibly bullish indicator that is flashing for Bitcoin
- He points to the cryptocurrency’s monthly RSI, noting that a monthly close above a specific level that it is nearing is historically followed by parabolic moves higher
- In the past, these movements have had an average return of 1,010%, but their size and length seem to diminish with time
Bitcoin and the entire crypto market have declined over the past 12 hours, which appears to be the direct result of the pressure that XRP is placing on the market due to its latest selloff.
Where the market trends in the mid-term likely won’t depend on XRP, which means that this latest round of selling pressure may mark a knee-jerk reaction from investors.
One analyst is noting that Bitcoin’s monthly RSI is flashing an incredibly bullish sign for where BTC trends next.
Bitcoin Struggles to Gain Momentum Following $28,500 Rejection
At the time of writing, Bitcoin is trading down just over 1% at its current price of $26,700.
The crypto has been trading between the upper-$26,000 region and the lower-$27,000 region throughout the past few days.
It has yet to garner enough buy-side support to break above the heavy resistance laced throughout the lower-$28,000 region. For now, this peak could mark a blow-off top.
Indicator Suggests BTC is About to Go Parabolic
One trader explained in a recent tweet that Bitcoin could be on the cusp of seeing a parabolic move higher in the days and weeks ahead.
He points to the cryptocurrency’s monthly RSI as an indicator for this possibility.
“BTC – Monthly RSI. Monthly candle is about to close above 80. When this happens, bullish trend continues, with an avg. return of 1010.87%. Each cycle is shorter.”
Image Courtesy of il Capo of Crypto. Source: BTCUSD on TradingView.
The coming few days should shed light on Bitcoin’s trend, as continued weakness could confirm $28,500 as a local high and lead to a deeper retrace.
Featured image from Unsplash. Charts from TradingView.
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