Analyst Benjamin Cowen shared that investors should be careful as the US dollar index (DXY) depreciates. Analyst says many investors are worried as DXY tumbles. bitcoin He underlined that the price has gone up. However, the analyst warned investors who had this thought.
Commenting on the 8% depreciation of DXY from its peak of 114.77 Benjamin Cowenwarned investors.
Koinfinans.com As we reported, the weakening DXY value also encourages investment in ‘risky assets’ by investors. For this reason, many investors follow DXY closely and determine their investment strategies.
According to Cowen, DXY is likely to have tested strong support around 103 and is on track to continue its rally rather than suddenly reversing this year’s uptrend.
Recalling the inflation of 1980 and the ‘dot-com’ crash of the early 2000s, Cowen said investors should think twice.
“Before you think that the US dollar is really losing strength, you should also look at what has happened in the past. Similar trends have been seen before, but it quickly became clear that this was short-term. Because you will realize that both during the period of high inflation in the 1980s and the dot-com crash in which we experienced a very deep recession, it did not end immediately after the initial rise of the dollar.
Yes, DXY went down for a while but then managed to rise. Therefore, you should always keep this detail in mind. I believe the dollar will strengthen again at the beginning of next year. At least until then, you can wait and set your strategy.”
According to the closely-followed analyst, DXY’s continued uptrend could be the catalyst for new bear market bottoms for crypto and equities.
You can follow the current price action here.
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.