The bitcoin price has moved back over $30k per coin, but the market remains in disbelief, skeptical of a bullish comeback via cryptocurrency.
However, updated monthly charts for Gold (XAU) and the US Dollar via the Dollar Currency Index (DXY) could provide early confirmation that something special is brewing.
All That Glitters Isn’t Gold: Why Bitcoin Is Ready to Shine
Starting with the precious metal that has been underpinning the entire financial system, let’s take a closer look at the long-term chart of gold vs bitcoin.
BTC is becoming more expensive priced in gold | XAUBTC on TradingView.com
Observing the XAUBTC 1-month chart above, which quotes the price of gold in Bitcoin, we can see that the June candlestick has crossed the Bollinger Band baseline.
The basis of the Bollinger Band is a 20-period simple moving average, and each Bollinger Band is set at 2 standard deviations of the SMA. The two bands expand and contract with the fluctuations.
Historically, when XAUBTC closed below the base, the price moved to indicate a lower Bollinger Band. At current levels, this could result in a new all-time low on the chart and a new all-time high for BTC in the price of an ounce of gold.
The DXY versus BTCUSD looks like gold | DXY/BTCUSD on TradingView.com
The Dollar Index is starting to fall against BTCUSD
In the above chart, the Dollar Currency Index (DXY) is placed against BTCUSD for another alternative look at the cryptocurrency market compared to the major macro assets. DXY is a basket of major currencies that is traded against the US dollar
Much like the gold chart earlier, the price is pushing beyond the Bollinger Band baseline discussed above, also referred to as the “mid-BB”.
However, unlike XAUBTC, the DXY/BTCUSD chart shows several months of consolidation below the basis. This likely indicates that the baseline has been confirmed as resistance.
In the past, this has also pushed the Bollinger Band lower, which should equal all-time lows on the not much used percentage. With DXY being a strength in the dollar, such a scenario could eventually point to new all-time highs on the BTCUSD benchmark chart.
This graph originally appeared in CoinChartist Version 9 (VIP). Gets discount 10 Subscribe for one year with this link: https://coinchartist.substack.com/BITCOINIST