In today’s formal indicator article, we will get into one of my favorite trading tools/topics when used in comparison to cryptocurrencies. DXY is known as the U.S. Dollar Currency Index. The DXY is the ticker symbol used while in trading form. The DXY (in most straightforward terms for understanding) would be a measure of the value of the U.S. dollar relative to a basket of many different foreign and crypto currencies. I have used the DXY in my Trading View chart (all free, account can be created, and usage is all free in Trading View) to make some of my trades in my cryptocurrency portfolio. Generally, when I feel the DXY is looking to make a significant move down, that is an excellent time to buy into crypto as crypto GENERALLY goes up while the DXY is heading down. This is not ALWAYS the case, but many times than not, it works that way. This works the opposite way as well. Generally, crypto is going down in price when the DXY is going on a run to the upside. Again, this is not a full-proof system and should NOT be considered financial advice. Any trades made by yourself are relevant to your understanding; you are doing so at YOUR own risk. These are just great ideas and concepts I learned over the years and have worked for me.
Let’s take a dive right into the DXY market chart and peek at what is precisely happening currently:
As we can see within this DXY chart, a technical indicator concept stands out to me RIGHT AWAY. This concept is called an “Ascending Broadening Wedge”. As you can see, DXY is at the top of the broadening wedge. If this technical analyst concept plays out, you could expect some downside in the price of the DXY. This is an excellent sign for stocks and crypto. As stated above in this article, when the DXY goes down, cryptos and stocks generally go up. If the DXY starts to head down in price, I will be looking to insert more fiat into the crypto realm! (Shoutout to @CryptoNoob for the detailed chart above, give them a follow if you would like!)
Don’t forget to give me a follow-on Twitter (@MattSenn5) for daily fundamental and technical analysis concepts, all generally crypto-related. Also, please take a moment to check out my crypto team New Century Gold, and we can teach you how to start making passive income in crypto! Finally, PASSIVE INCOME is a great way to fight against the volatile, scary crypto markets!!!
(This article is not financial advice and should not be used in that manner, this is a free educational tool for your reading pleasure).
Written by: Matt Senn