Bitcoin Sets One High Following Another as Analysts Predict Dollar Doom
So it appears, the cryptocurrency’s short-term drawback correction is less likely to outweigh its long-term bullish bias (so long as the US dollar loses its purchasing power).
Bitcoin’s upside down moves have made it an overbought asset. Simply put, its price is running way ahead of its typical requirement, as confirmed by the Relative Strength Index, a barometer to gauge”the size of recent price changes to appraise an asset’s overbought or oversold conditions.”
From the opinions of legendary investors such as Paul Tudor Jones and Stan Druckenmiller, Bitcoin is an perfect hedge against the US dollar’s bearish outlook. Their sentiments toward the cryptocurrency were on their prime this week as Bitcoin closed above $16,000.
It will allow the money to flow back into the emerging markets, thereby causing a value migration from the US dollar to foreign assets.
The US Dollar Index, which measures the greenback against a basket of foreign currencies, fell 1.92 percent a week after Mr. Biden gained lead against US President Donald Trump.
Bitcoin posts consecutive weekly earnings without a hint of a downside correction. Source: BTCUSD on TradingView.com
The end result is a new price breakout. This week, Bitcoin [nearly ] reached $16,500, a level it last tested in December 2017 during its bearish correction from its all-time high near $20,000 the previous month. None of the additional anti-inflation resources (read gold) were able to match Bitcoin’s ascending momentum.
The last few months have witnessed the cryptocurrency in its organically-driven bullish avatars. It broke resistance levels that seemed too difficult to achieve ($10,500). It then built a concrete upside outlook upon the newly-found price floors, using macro narratives such as inflation to bring in more quality capital.
Nonetheless, the index recouped a portion of its losses this week as investors assessed a delay in the election counts, followed by doubt led by Mr. Trump’s lawsuits against the Democrats alleging election fraud.
Ideally, Bitcoin should undergo a trend reversal to neutralize its excessively bullish bias. But traders have turned blind-eyed on the RSI that’s been in an overbought zone because mid-October 2020.
Bitcoin is rallying relentlessly, insomuch that it’s touching a new yearly high every other day.
“With Stan Druckenmiller, Michael Saylor, and much more listed companies jumping into the Bitcoin markets, it is quite clear that we’re in the early phase of a new bull cycle,” said Michaël van de Poppe, an independent market analyst.
Published at Fri, 13 Nov 2020 06:41:19 +0000
The BTC/USD weekly RSI—-has expanded its welcome inside the overbought territory for months, as shown in the chart above. The pair may wind up losing its upside strength after a time. Nevertheless, it’s more likely to recover the bias provided that global fundamentals stay negative.
“Victory for President-Elect Biden signifies a return to more conventional governance. As the President’s state, it is going to result in a significant change in how foreign policy is conducted. Alliance building will return.
Strategists in the US financial industry believe the greenback is due to fall lower during a Joe Biden presidency.