Bitcoin (BTC) hopes to recover $ 45,000 on October 1, when the US dollar fell after reaching an annual high. Bitcoin’s tight inverse correlation with the dollar over the past month indicates that the dollar’s weakness may push the price of BTC higher in the coming sessions.
Bitcoin to dollar ratio on the hourly chart. Source: TradingView
Dollars fall after labor market shock
In particular, the US Dollar Index (DXY), which measures the strength of the dollar against a basket of six foreign currencies, including the euro and the British pound, reached 94.50 on Thursday for the first time since 28 September 2020. But after that it fell. news about the growth of unemployment benefit applications in the US, contrary to expectations of a decline. …
Work data published on Thursday showed that the number of unemployed claims rose to 362,000 last week from 351,000 last week and against economists’ expectations of 333,000. As a result, the number of applications again hovers around 2.8 million for five weeks in a row.
This could be news for the markets that the Fed can postpone the decline in its $ 120 billion buying program from November to a later month, thus keeping interest rates low and temporarily resuming the strength of the dollar.
Daily DXY price chart. Source: TradingView
At the time of writing, the index is trading at 94,263.
Technical forecast expects Bitcoin to jump and fall in dollars
Technical data also showed that the dollar may correct in the future. For example, independent market analyst TradingShot has seen a dollar index within a dynamic pattern that is about to peak after a correction in upcoming sessions, as shown in the chart below.
Daily overview of US index prices with the technical setting for the dynamics. Source: TradingShot, TradingView
TradingShot writes: “According to the 1D Relative Strength Index (RSI), it appears that DXY is in better harmony from August 15, 2018.”
“DXY creates strong adhesion to the woofer.”
Meanwhile, a recent sale in the bitcoin market recently drew a declining wedge pattern. In detail, falling wedges are shown when price trends enter a channel consisting of two diverging and downward lines.
Conventional analysts see the declining wedge pattern as a bullish reversal indicator, noting that a break above the upper trend line moves the price up to the maximum distance between the wedge trend lines.
The daily BTC / USD price chart shows a declining wedge configuration. Source: TradingView
Maximum construction height is approximately $ 10,000. As a result, the bitcoin price can test at least $ 50,000 again if the wedge breaks out as intended.
Weaker dollar means stronger Bitcoin
On the other hand, a disappointing job report could increase temporary investor appetite for bitcoin.
RELATED: Bitcoin Sharp Drop From $ 50K Associated With Stronger US Dollars And Gold – Shows Correlation
Vasya Zupan, head of the Matrix Exchange, told the Cointelegraph that the weakening of the dollar and the weakening among rising inflation will continue to pressure investors to invest extra money in the cryptocurrency markets. He said:
“Bitcoin has integrated inflation protection into its core offering, and therefore sustained high US inflation can only push it to a higher level. Therefore, in the long run, the dollar will still be worth less than bitcoin.”