The dollar is in sharp decline, and it has allowed other currencies to gain the upper hand. It has also let Bitcoin, gold, altcoins, and other hard assets shine.
But will a coming dead cat bounce in the dollar devastate recent crypto market returns and cause a temporary pullback? Or is this the start of a bigger comeback by the king of all cash-based fiat currencies?
USD: After Dramatic Drop To Two Year Low, TD Sequential Triggers 9 & 13 Buy Signals
Nearly every financial asset across any market is traded against the dollar and its exchange rate is valued in USD. Even Bitcoin, gold, and altcoins typically trade against the dollar as the dominant base currency pair.
The dollar’s status as the global reserve currency gives it incredible influence over all other markets. When the dollar is strong, so is the United States economy, and stocks boom as a result.
But when the dollar is in decline, as we’ve witnessed recently, hard assets like gold, Bitcoin, and real estate climb. The recent fall in the once almighty and dominant dollar set the currency back to a fresh two-year low.
DXY TD Sequential 9 + S13 Setup | Source: TradingView
According to the TD Sequential indicator, a dead cat bounce or perhaps a full comeback is near. The market timing indicator has triggered a 9 and 13 buy setup on daily DXY charts. DXY is the dollar currency index weighing its performance against the rest of the market.
Related Reading | Here’s Why a Bouncing U.S. Dollar Is Bad News For Bitcoin
Further technical analysis backs up the indicator’s call that a reversal could soon be coming in the dollar. DXY is currently forming a falling wedge ready to break out, coinciding with a bullish divergence on the Relative Strenght Index.
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