A closely followed crypto strategist is calling for a Bitcoin (BTC) surge just as the US dollar index (DXY) is showing signs that its parabolic rally this year could be coming to an end.
In a new strategy session, Jason Pizzino tells his 279,000 YouTube subscribers that the US dollar index won’t stop crashing as it threatens to break a key support area on the high timeframe chart.
Traders keep a close eye on the US dollar index as weakness in the DXY suggests that investors are parting with their dollars to buy risk assets like stocks or crypto.
Says Pizzino,
“[The DXY] is at [104.506], so closes under this level is going to be critical for the US dollar [index]. If it closes under [104.5], [it is] probably looking much, much weaker. It starts to swing the probabilities in the favor of weakening US dollar.”
According to Pizzino, the US dollar may be ending its parabolic rally, similar to what happened in the early 2000s when the DXY plunged from around 120 in 2001 to around 70 in 2007.
“Really, this has collapsed a little bit quicker than I was anticipating… We’ve been watching that peak that came out through that previous 20-year cycle. This is during the tech boom [in 2001] and then the bust, so the subsequent bust that happened through the stock markets… But we all know from history – 2004, 2005, 2006, 2007 – nice strong years up for real estate while the US dollar was dropping.
This is what we’re anticipating this time around. Sure you’re going to get some bumps. I’m not saying we’re going to dump in much of a same sort of percentage but we should tend to see the dollar start to fall into the later half of the cycle.”
Looking at Bitcoin, the crypto analyst believes that BTC may pull back to $16,700 before it can start the next leg up.
“What this means is that we set up again to try and break out of this high of $17,200 and head towards our target above $17,600. So that’s our step two, our multi-day close area that we want to see Bitcoin for furthered strength, and then set itself up for the moves above $18,600.”
At time of writing, Bitcoin is changing hands for $17,044.
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Source: https://dailyhodl.com/2022/12/04/popular-analyst-predicts-bitcoin-btc-rally-says-us-dollar-flashing-signs-of-ending-parabolic-surge/