Bitcoin Analysis: Comparing DXY & BTC

In my recent post, DAOs and Democracy, I was writing about this ending DAO project I'm involved with. There was a vote and one proposal was to sell everything and distribute the funds fairly to all stakers. It won by a landslide.

I was afraid that I might end up on the paying side to cover the losses of those who invested heavily in the governance token which took the biggest hit but seems like I'm getting a pretty ok amount.

The distribution will be in BTC so in this post I'll be focusing on the king itself.

So what to do with the BTC? Sell, hold? Lately, I've been checking up on different indicators and tools and now wanted to show you what I came up with.

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Bitcoin Analysis

Was it the CEO of FTX who recently stated that the worst is over? It's obvious that BTC is oversold at the moment but I can still see bearish signs on the horizon. If I was to get bullish on Bitcoin it would need to break the 22k resistance which has been tested twice now within a month.

Here is a snapshot of where we are now and my drawings of support and resistance areas:

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Some notes:

• 22k has clearly become a resistance level for BTC within a month.
• Support is found between 18.5k - 19.5k and has been tested and held 3 times now.
• Note that there was a similar sideways movement in May - June before the price fell to these levels.
• If BTC gets rejected on 22k we will then test the support for the fourth time and if it doesn't hold, the next strong support is somewhere at 12k.

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DXY

The dollar has been on the rise for quite a long time now and crossed paths with Euro just recently when both being the exact same value for a while. US Dollar index, DXY, measures the value of the dollar compared to the bag of other fiat currencies in which the Euro holds a big weight.

Some time ago when I was more into trading I used all sorts of tools to help me make better decisions. DXY chart is one of them. Even though it's displaying the strength of the dollar we can zoom out a little and compare it to Bitcoins historical chart.

So, if we take a look at the chart below we can see that DXY has been coming down from 2017 to 2018. Then going up from that till the end of the year 2019.

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Down below is BTC chart and if you check those same years you can see BTC moving in the opposite direction. Again, in the summer 2020 BTC started to really pump while DXY was heading down. In 2021 they went hand in hand for a little while until BTC fell and DXY just keeps going.

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DXY & BTC This Year

Now if we take a closer look and compare DXY and BTC this year we can clearly see that when DXY gained more strength, BTC value decreased. Unfortunately, DXY seems to be gaining more and more momentum.

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Of course, this is just one way to look at the big picture and the DXY chart is just one indicator but if DXY would get rejected, that would be a strong BTC buy signal for me.

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My Position

If the situation remains like this and if that DAO stuff gets sorted and I get my funds in RBTC, I'll probably move to a stable position for a while. That being said, if the support would break, I would definitely buy back when the next support is found. That's a lot of 'ifs'! But we'll see how it goes.

Note that this is not financial advice but charts I keep eyeing occasionally.

Thank you for reading!