Closely followed crypto analysts say that a weakening US dollar will lead to a huge rally in digital assets in the near future.
Glassnode co-founders Jan Happel and Yann Allemann, who share the Negentropic handle on the social media platform X, say that the dollar index (DXY) is nearing the end of a bounce which will ultimately lead to a large decline.
The DXY compares the US dollar to a basket of other major foreign currencies and is often used to gauge the strength of risk assets.
Using Elliot Wave Theory, which suggests that price corrections happen in three major waves, the analysts say that DXY is about to finish its second wave an upward impulse before dropping down to new local lows, propelling crypto and other risk assets upward.
“EVERYTHING is about DXY.
Strong DXY > risk assets struggle.
Weak DXY > risk assets rally.
DXY top was in October 2023. First leg until late Dec. 2023.
In 2024, DXY has been bouncing.
We believe this has been a wave 2 bounce and that it is DONE!
Now DXY is to begin [its] decline. Hence, risk assets should soar.
We believe this will be the driver of a crypto blow-off top.”
Happel and Allemann recently called for Bitcoin (BTC) to go parabolic after printing a similar corrective pattern seen in the previous two bull markets. Using Fibonacci extensions, the analysts forecast a $120,000 price tag for BTC sometime around July of this year, much sooner than what most analysts are currently expecting.
BTC has moved to the 6.618 Fibonacci extension after a bull flag correction. We are currently in a small correction like in late 2017 and late 2020.
Will history rhyme in 2024 and BTC move to its 6.618 Fib extension in this bull market? That would give us a target of ~$120,000. Time will tell!
At time of writing, Bitcoin is trading at $43,302.
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