The crypto markets are in deep distress as the upswings are not able to respect the immediate resistance zone. The bulls have been trapped constantly, as the top cryptos are forming lower highs & lows round-the-clock. However, while a continued bearish trend was speculated by many, still a ray of hope is seen as DXY Index may land in trouble soon.
The strength of the US Dollar denoted by the DXY Index has been on a rise for the past fortnight. Hence the USD is becoming stronger compared to the other fiat currencies and also the cryptos. In a recent update, European Euro(EUR) has dropped to record lows against the USD, plunging below $1.
Nevertheless, the bullish momentum of the DXY Index may soon be challenged by the bears as the Index may be closer to a significant rejection.
A popular analyst, Lark Davis, shared the daily chart of the DXY Index and pointed out the formation of a double top pattern. Interestingly, the Index has already faced rejection and hence may be primed towards the neckline at around $105. A drop from here may pave way for the cryptos to thrive later.
Conversely, the S&P 500 is following the 2008 crash, following a similar pattern and hence prone to drop hard in the coming days.
As seen in the above chart, the current trend is mirroring the 2008 S&P movements which clearly point to a huge bearish trend ahead. While the DXY Index is at a crucial phase, a notable plunge may invalidate the above speculation.
If in case, the DXY Index manages to rebound, darker days may be fast approaching. The top cryptos like Bitcoin, Ethereum, etc could form new lows in 2022 before rebounding firmly, with a lessened bearish impact.
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