Popular crypto analyst Benjamin Cowen says an overlooked catalyst is Bitcoin (BTC) He believes it can ignite a big long-term rally for him.
In a recent strategy session, the analyst takes a look at the dollar index (DXY), which compares the US dollar to a basket of other major fiat currencies. Generally speaking, a weaker dollar can mean higher prices on most assets.
The analyst says that the factor that could put extra bullish energy on Bitcoin is DXY, which started a downward macro trend. According to Cowen, DXY is potentially on the verge of a downtrend as it was rejected from its 100-week simple moving average (SMA):
“Ideally speaking, we would like to see this continue to drop so that the really best conditions for Bitcoin are to occur. This would be the ideal situation for Bitcoin….”
According to Cowen, DXY has been trading in a major descending channel for nearly 30 years. According to the crypto analyst, there is now much more room at the bottom of the channel than at the top, which could mean more downside for the dollar and therefore higher Bitcoin prices.
Cowen says that even though we are facing a rising DXY for most of Bitcoin’s lifetime, BTC still manages to maintain its long-term bullish structure. Citing an example of BTC rising despite a high DXY, the analyst speculates on what might happen if DXY eventually enters a more significant downtrend:
“The dollar has risen more or less during this time. It went up, but there were a few key times when the dollar moved down and corresponded to Bitcoin bull markets.
Imagine what Bitcoin could do if the dollar fell again… I think that would be incredibly bullish for Bitcoin.”
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.