025/04/04 Is there still hope for tariff stick?
Trump's tariff stick has struck the whole world
Is there still hope for the cryptocurrency circle?
We all know
Bitcoin is priced in US dollars
Therefore, in theory,
the correlation coefficient between the US dollar and Bitcoin is negative,
meaning that when the dollar rises, Bitcoin tends to fall,
and when the dollar depreciates, Bitcoin tends to rise.
However, due to the time required for capital effects to ferment,
there will be a lag in the reaction of Bitcoin prices.
Next, let's look at
the relationship chart between the US dollar index and Bitcoin.
The purple line in the chart represents the US dollar index,
and the candlesticks represent the price trend of Bitcoin.
We can observe
that when the US dollar index shows a depreciation trend,
Bitcoin will start to react with an upward movement weeks to months later.
Conversely, when the US dollar index shows an appreciation trend,
Bitcoin will begin to decline weeks to months later.
Next, let's look at
the US dollar index, which started to show an appreciation trend at the end of September last year,
reaching its first peak in mid-January.
The process lasted a total of 108 days,
and Bitcoin's first peak
has now also experienced 107 days.
Therefore,
Bitcoin's low point may appear in the coming days,
and since the US dollar index reached its peak in mid-January,
it has started to show a depreciation trend for 80 days.
Thus, Bitcoin has a chance to reach a low point in a few days
and then launch a rebound lasting 80 days until mid-June.
Whether the rebound can continue further
depends on whether the US dollar index can continue to depreciate.
Therefore, the suggestion here is
that in the coming days, one can start to gradually position long positions
to take advantage of a rebound,
and then adjust to a long-term short position based on the performance of the US dollar index.
#Market analysis for reference only #Does not constitute investment advice
