The year was 2009 and the dollar had just recovered from The Great Recession. Bitcoin was born and grew up while the dollar regained its throne. After ten years of strengthening, the pandemic and associated monetary response to sustain the economy, caused the almighty dollar to weaken again.
And according to the Dollar Currency Index losing a decade long trendline, this weakness could allow Bitcoin to gain ground against USD like never before.
The Birth Of Bitcoin And The Delayed Death Of The Dollar
Bitcoin’s very design and existence are in direct opposition to the dollar. Over the last one hundred years or so, the United States Dollar has dominated the globe as the reserve currency asset.
And while The Great Recession and the resulting money-printing bank bailouts first hurt the dollar, a more than ten-year recovery prevented any economic collapse.
But because printing more money only delays the inevitable, a brilliant and selfless individual by the pseudonym Satoshi Nakamoto sought to break the cycle and created the first-ever cryptocurrency: Bitcoin.
The fiat money supply is ever-expanding, with 20% of US dollars printing in 2020 alone, while there will only ever be 21 million BTC. Rather than being an inflationary asset that loses value over time as its total capitalization expands, Bitcoin is deflationary.
And because it is decentralized, governments cannot control it or manipulate it to create more BTC, and with it more problems.
The dollar is losing a decade long trendline starting around when Bitcoin was just a baby | Source: DXY on TradingView.com
The Great Recession Recovery Trendline Breaks Down: What It Could Mean For Crypto
The ten-year trend line that supported the dollar all while Bitcoin learned to walk, and eventually run, is breaking down on monthly timeframes for the first time since the cryptocurrency was first created.
The last major breakdown of the dollar took place at the dollar’s peak in late 2016, but the trendline remained untested then. The steep fall in the DXY Dollar Currency Index mimics the trajectory of Bitcoin’s rise but in inverse.
As the dollar dove, the cryptocurrency climbed. No assets move up or down in a straight line, and the dollar began to bounce just as the crypto market topped in late 2017 and early 2018.
Consolidation in the dollar for three more years has begun to break down and it has lost the trendline, just as Bitcoin revisits the peak set at the last bounce.
The leading cryptocurrency by market cap is now back at $20,000, and according to the DXY Dollar Currency Index, the ten-year trendline breaking down, and a massive decade long head and shoulders topping pattern potentially confirming with a breach of the trendline, another 2017-like rally is almost a given at this point.
Not only is the dollar falling, but a new bull market is starting in Bitcoin. And while there is no denying the two things are correlated, where Bitcoin is now and then is a very different level in terms of price and adoption, making it likely that the cryptocurrency skyrockets as the dollar sells off to new lows.
Featured image from Deposit Photos, Charts from TradingView.com
The post The Dollar Losing A Decade Long Trendline Could Send Bitcoin Skyrocketing appeared first on Crypto new media.