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Altcoin Season Incoming: Analyst Forecasts Further Bitcoin Correction, Signals Alts Market Upswing

Jason Pizzino, a seasoned macro investor and swing trader, has recently put forward his analysis indicating a potential pullback for Bitcoin.

His observations, informed by a deep understanding of market dynamics, suggest that Bitcoin’s prolonged rally could soon give way to further correction.

Altcoins Set To Shine As Bitcoin Undergoes Correction

Pizzino’s analysis is grounded in a comprehensive review of various market indicators. The analyst has been closely monitoring the altcoin sector, noting an accumulation of upside potential which could lead to impactful market movements, especially with the upcoming Bitcoin halving in view.

This anticipation of a shift in market sentiment is further supported by his examination of the US Dollar Index Futures chart, which shows a downward trend and recent significant drops in a single trading day.

US dollar Index (DXY) price chart on TradingView

Pizzino interprets these movements as indicators of further downside, influenced by the general macroeconomic conditions.

While Bitcoin braces for potential setbacks, Pizzino’s analysis reveals a silver lining for the broader cryptocurrency market, particularly altcoins. His study of the Total3 chart, excluding Bitcoin and Ethereum, shows a latent potential for growth in the altcoin sector.

This observation aligns with the cyclic nature of the crypto market, characterized by alternating periods of fear and greed. According to Pizzino, the market is currently experiencing one of its lengthiest stretch of positive sentiment, a trend he expects to shift in alignment with historical market behaviors.

Bitcoin’s Strong Support Zone And Emerging Altcoin Focus

In parallel, another prominent crypto analyst, Ali Charts, has identified a critical support zone for Bitcoin. Between $37,150 and $38,360, a substantial number of Bitcoin transactions have occurred, with roughly 1.52 million addresses purchasing around 534,000 BTC.

This significant level of accumulation has established a strong foundation, potentially curtailing any further decline in Bitcoin’s value below that level.

Despite the correction, Bitcoin has shown resilience in its recovery from recent dips. Although the asset is still down by 2.7% over the past week and nearly 1% in the past 24 hours, it has managed to surpass the $42,000 mark after previously falling below $41,000 on Tuesday.

Bitcoin (BTC) price chart on TradingView

However, a noticeable decline in Bitcoin’s daily trading volume, from $30 billion earlier this week to $13.6 billion, hints at a shift in investor focus towards the altcoin market. This aligns with Pizzino’s prediction and could be the harbinger of a new phase in the crypto market, where altcoins demonstrate significant rally alongside Bitcoin.

Featured image from Unsplash, Chart from TradingView

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Bitcoin Price Targets $46,000 As DXY Receives Kiss Of Death

In a striking dual analysis, the financial charts paint contrasting futures for the US Dollar Index (DXY) and Bitcoin (BTC). Gert van Lagen, a technical analyst, has provided a bearish prognosis for the DXY, while simultaneously highlighting a bullish setup for Bitcoin that could see it aiming for a $46,000 target.

DXY Receives Kiss Of Death

The DXY has been in an upward trend since July, as shown by the blue ascending trend line on the daily chart. However, this line was broken to the downside on October 9, indicating a change in market sentiment. Van Lagen explains, “Blue uptrend since July has been broken too. Time to continue down.”

DXY 1-day chart

This sentiment is reinforced by the price action within the black channel from the beginning of October till recently, where a period of consolidation is visible, succeeded by a strong downward move. The DXY dropped by 1.2% last Friday, November 3, to 104.92 and is currently undergoing a retest of the channel, a common technical pattern where the price moves back to the breakdown point before continuing in the direction of the initial direction.

A third bearish argument for the DXY is the rejection at the highlighted red zone on the chart which signifies a high timeframe Fibonacci resistance area. The Fibonacci retracement is a popular tool among traders to identify potential reversal levels. The DXY’s price action shows a “clear rejection” at this level, where the index attempted to rise but was pushed back down, reinforcing the bearish stance.

Bitcoin Price Targets $46,000

Amidst the weakness of the DXY, the inverse correlation with Bitcoin becomes a focal point for crypto investors. Gert van Lagen provides insight into Bitcoin’s potential trajectory, observing a bullish pattern emerging on its 6-hour chart.

Bitcoin bullish pennant

“BTC [6h] – Bullish pennant in play targeting $46k. The pennant is part of the shown ascending channel,” remarked van Lagen. The chart displays Bitcoin’s price consolidating in a pennant structure, a continuation pattern that signals a pause in a strong upward or downward trend before the next move.

The pennant is delineated by converging trend lines which have been formed by connecting the sequential highs and lows of price action, converging to a point indicative of an imminent breakout.

In this case, the pennant follows a significant upward trend, suggesting that the breakout is likely to continue in the bullish direction. The ascending channel, highlighted by two parallel upward-sloping lines, encompasses the entire bullish movement of Bitcoin on the chart, including the pennant formation. This channel serves as a guide for the price trend, indicating where support and resistance levels are anticipated at the moment.

Van Lagen’s analysis posits a targeted price of $46,000 upon the resolution of the pennant, a level that is determined by the height of the prior move that preceded the pennant, projected upward from the point of breakout. The dashed lines on the chart illustrate the potential path Bitcoin’s price could take following the breakout.

An important detail in van Lagen’s chart is the ‘Invalidation’ level marked below the pennant. This level at $34,103 is critical as it signifies where the bullish hypothesis would be considered incorrect, serving as a stop-loss point for traders acting on this pattern.

At press time, BTC traded at $34,625.

Bitcoin price

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Crypto Is On The Brink Of Explosion As 9-Year DXY Formation Returns

An inverse correlation between the crypto market and the DXY has often helped to signal when a bull rally is on the horizon. One of the most notable instances of this happened 9 years ago, and since then, the formation has not returned, until now, signaling a massive price surge in October.

DXY Readies To Clock 12th Consecutive Candles

In an X (formerly Twitter) post, crypto analyst TheCryptoMann has revealed an important formation in the DXY. The DXY is the United States Dollar Index which measures the value of the dollar to other major (6) currencies around the world.

Now, since Bitcoin is often touted as an alternate and better currency to the likes of the US dollar, there is often some competition between them leading to an inverse correlation over the years. This is why this DXY formation is important.

As TheCryptoMann points out, the DXY is headed toward a 12th consecutive green candle which is bullish for the crypto market. This is because the last time that this happened was in 2014, and the results were very bullish for crypto.

The analyst explains that when this happened in 2014, the DXY had fallen 8%. Crypto had then gone in the opposite direction, mounting a rather impressive rally. A look at the chart shows that in the year 2014, the crypto market went from $5.4 billion to over $8.2 billion, an over 50% surge in price.

Crypto total market cap chart from Tradingview.com (DXY)

A Bullish Time For Crypto

TheCryptoMann likens the current movement to what took place in 2014 and actually expects this movement to repeat once more. As he explains, the incoming correction in the DXY will see the crypto market explode as it did 9 years ago.

He also points out that “the DXY is also being rejected from the 0.5 FIB Retracement level from its most recent local highs and lows!”

He further added:

There is a clear inverse correlation between the DXY and the cryptocurrency market. So over the next month, we’re about to see some major price movements, so eyes on the market.

Another analyst Cryptoinsighuk also seems to share the views of TheCryptoMann as he also believes there is correction coming for the DXY. “Also, whilst sentiment is this bad we are having the SBF trial. This is negative towards Crypto, tells me the bottom could be very close in this move,” the analyst added.

If TheCryptoMann’s forecast is correct, then the crypto market could be getting ready for a massive move to the upside. A similar rally would see the total market cap go from $1.065 trillion currently to over $1.5 trillion, signaling a bullish end to the year 2023.

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Will Bitcoin Drop To $20,000? EURUSD Correlation Indicates It Might

In recent discussions surrounding Bitcoin (BTC) and its potential future price trajectory, crypto-enthusiasts and analysts alike are finding new correlations to dissect. Most notably, a correlation with the EURUSD pair (the euro against the US dollar) has come into the spotlight due to a Twitter thread by esteemed analyst Josh Olszewicz.

Olszewicz begins by setting the stage, drawing attention to the widely acknowledged inverse correlation between Bitcoin and the DXY (US Dollar Index). He notes, “Most are aware of the strong historic BTC-DXY inverse correlation. DXY is a USD index against a basket of currencies which has a EURUSD weighting of around 58%. So the BTC-EURUSD correlation should also be relatively high.”

Will Bitcoin Price Follow EURUSD?

What’s intriguing here is the observation Olszewicz makes about the BTC-EURUSD correlation in the period following the pandemic and the last Bitcoin halving. He mentions that the “post-pandemic (post-halving) EURUSD pair has led BTC in both the bullish and bearish direction by anywhere from a month to a full year.”

Bitcoin EURUSD

This pattern, if it continues to persist, might spell some bearish tendencies for Bitcoin. Olszewicz goes on to suggest that, “If this relationship continues to hold, BTC should break down towards the BTFP low of $20k.” This statement is a significant one, indicating a potential substantial drop from its current position, all based on the movement patterns of the EURUSD.

Further supporting this projection, he highlights a technical pattern observed in both BTC and EURUSD, stating, “the EURUSD has completed a bearish H&S, similar to BTC, providing technical fuel for further downside.” A ‘bearish H&S’ refers to the bearish ‘head and shoulders’ pattern, a chart formation that predicts a bullish-to-bearish trend reversal.

However, it’s not all gloom and doom. Olszewicz does provide a glimmer of hope for Bitcoin bulls. He posits, “If you’re bullish on BTC here, you’re either hoping this relationship weakens/breaks, or the EURUSD begins to strengthen instead of continuing to weaken.”

BTC’s Second High Does Not Fit

Olszewicz also touches upon some “tin foil” speculations, discussing how the BTC-EURUSD correlation had been seemingly disrupted during Bitcoin’s second high in November 2022. He suggests that the continued fall of EURUSD did not immediately impact Bitcoin’s bullish trend, speculating that actions from major crypto players like 3AC, FTX/Alameda, and the Anchor BTC reserve might have played a role.

He states, “It is both possible and likely that the funny business behind the scenes by 3AC & FTX/Alameda, as well as the Anchor BTC reserve, helped delay the inevitable bearish trend by about a year.”

Bitcoin EURUSD

While correlations can provide insight, they are by no means a guarantee of future market movements. Investors should exercise caution and conduct their own research when making investment decisions. Rose Premium Signals added, “interesting observation about the BTC-EURUSD correlation. It’s essential to consider multiple factors in crypto analysis. The relationship could indeed evolve, impacting BTC’s future movements.”

At press time, BTC stood at $26,180.

BTC price

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Turning Point For Bitcoin And Crypto? DXY At 5-Month High

In a crucial development for the financial markets, the US Dollar Index (DXY) has surged to its highest level since March, marking a pivotal moment for Bitcoin and the broader crypto sector. The DXY, which gauges the Greenback’s performance against a basket of six major currencies, has extended its gains above the 104.000 mark in the past four day, reaching a five-month peak at 104.907. At press time, the DXY was trading at 104.773.

From a technical standpoint, the DXY has exhibited a bullish bias, especially after surpassing the 200-day Moving Average (DMA) on Thursday last week. For the DXY to solidify its bullish stance, it needs to surpass the year-to-date (YTD) high of 105.882, which would then bring the 106.000 mark into focus. Surpassing this level could set the stage for the DXY to challenge the November 30 daily high of 107.195 and potentially rally towards March’s 21 high of 107.993.

However, on the flip side, if the DXY were to dip below 104.538, it could trigger a correction, targeting the 200-DMA (currently at $103.326). In the short term, while the DXY remains bullish, it must breach the 38.2% Fibonacci retracement level at $105.368.

DXY

Renowned macro analyst Henrik Zeberg weighed in on the DXY’s trajectory, predicting that DXY bulls shouldn’t get too excited, “I just love this BEARISH – bullish move in DXY. Let the DXY Bulls get overly excited! Exactly what is needed for the reversal. 106.0 – 106.3 (is key).”

How Will Bitcoin Respond To DXY’s Strength

The inverse correlation between Bitcoin and the DXY has been a topic of interest in recent years. With the DXY’s recent surge, concerns are mounting about potential downward pressure on Bitcoin and crypto in the short-term. Some analysts believe that another uptick in the dollar could push Bitcoin towards the $23.500 mark, especially given the relatively low levels of open interest (OI) and volume for BTC.

Glassnode founders Yann Allemann and Jan Happel provided insights into Bitcoin’s outlook, noting, “Mid-term outlook: Favorable risk/reward, but short-term, uncertain ($25.8k – $26.8k). Possible downside ($23.8k – $24.8k) due to bearish trend. Signs of bottoming: RSI bullish divergence, fading volatility. […] We’re close to the bottom, but the environment is still unstable.”

Elaborating on the current market conditions, they added, “We’re in an unstable environment. Wait for the dip or buy the breakout. Bitcoin Risk Signal near extremes. $25.8k – $26.8k is No Man’s Land. The mid-term risk/reward is favorable for BTC and crypto.” Moreover, they predict that Bitcoin will bottom out in mid-September when the DXY reaches its top, setting Bitcoin and crypto up for a stellar October.

At press time, BTC price remained stagnant below $27,800.

Bitcoin price

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Glassnode Co-Founder’s Prediction: DXY Set To Peak, Fueling Potential Bitcoin Rally To $37,000

The largest cryptocurrency by market cap, Bitcoin (BTC), dropped after a prolonged period of consolidation around the $29,000 mark. The failure to sustain this level has resulted in a decline to $26,000.

Interestingly, Bitcoin’s recent reversal has coincided with speculations of an imminent bull run, with many believing that the cryptocurrency winter is over and that lower price levels will not be revisited. 

Nonetheless, this sentiment shifted on July 14th when the US Dollar Index (DXY) initiated a robust rally, surging from 99 points to its current level of 103.

As the DXY began its ascent, Bitcoin’s trajectory turned downward, leading to a downtrend that caused the cryptocurrency to relinquish a significant portion of its 2023 gains. Conversely, before July, BTC experienced a surge to its yearly high of $31,800, while the DXY declined.

Despite this development, Glassnode co-founder Yan Allemann suggests that in the coming months, it will be Bitcoin’s turn to reclaim the spotlight and assert its dominance once again.

BTC’s Last Consolidation Phase?

Glassnode co-founder Yan Allemann has shared insights on the current market conditions and predicts an imminent surge in Bitcoin’s value as the autumn approaches.

Bitcoin

Allemann’s analysis suggests that the US Dollar is expected to reach a peak level of 106, which will catalyze a prime environment for Bitcoin. 

Historically, the inverse correlation between the Dollar and Bitcoin has been observed, where a stronger Dollar tends to put downward pressure on the cryptocurrency’s price. Conversely, a peak in the Dollar often coincides with a favorable environment for Bitcoin to thrive.

This said, Allemann believes that Bitcoin is projected to reach the $37,000 level before embarking on a significant upward movement during the autumn season. 

This anticipated surge in value aligns with the patterns observed in previous market cycles, where Bitcoin has experienced notable price rallies during the latter part of the year.

It remains to be seen how this narrative unfolds, but one thing is clear: the dynamics between Bitcoin and the US dollar continue to shape the cryptocurrency landscape. 

Historical Data Reveals September Struggles For Bitcoin

According to data by CoinGlass, August, and September have historically presented challenges for Bitcoin, making them notorious months for the cryptocurrency’s performance. 

With 10 days remaining until the monthly close, August has already proven to be a difficult month for Bitcoin, experiencing a 12% decline over the past 30 days. However, this downtrend may not come to a halt just yet, as historical data indicates that September could pose additional obstacles to Bitcoin’s price trajectory.

Bitcoin

Examining the chart above, it becomes evident that September has historically been a challenging period for Bitcoin. 

In some instances, the cryptocurrency has witnessed substantial price drops, reaching as high as 19%. This suggests that the coming month could potentially be characterized by further downward pressure on Bitcoin’s price.

However, it is important to note that historical trends also indicate the possibility of more modest declines. In 2013, for example, Bitcoin’s price only decreased by 1% during September, defying the broader negative sentiment associated with the month. 

This demonstrates that while September has a historical reputation for difficulty, it does not guarantee a significant downturn for Bitcoin in every instance.

While Bitcoin has faced headwinds in August and historically in September, it is worth remembering that the cryptocurrency has demonstrated resilience and the ability to recover from downturns in the past. 

Market conditions, macroeconomic factors, and regulatory developments can all contribute to the price fluctuations of Bitcoin and other cryptocurrencies.

Bitcoin

Featured image from iStock, chart from TradingView.com