To most in crypto, the US dollar is irrelevant. And in many ways, they’re right.
However, when it comes to the charts, the USD index still matters, as I’ll explain in today’s issue.
I’ll also provide updates on BTC, ETH, VET, and kitty.
Let’s get it!
US Dollar Index (DXY)
The DXY is refusing to back down. And that’s a problem for crypto bulls like myself.
I’ve discussed the inverse relationship between the US dollar and Bitcoin in past videos. It makes a lot of sense considering the USD is still the world’s reserve currency.
Today, the DXY is breaking above the 94.60 level. This is where the market sold off on Friday.
As I’ve stated for a while now, we need a close below 93.50 to signal further weakness. Obviously, a close above 94.60 isn’t what we want to see.
Bitcoin just shook out a lot of excess leverage with an aggressive pullback to $63,000?
So is that it?
Time will tell. However, given the DXY strength and lack of volume from BTC during this latest breakout, I’m not so sure.
An extended pullback here certainly doesn’t fit the 2017 fractal that I’ve discussed several times. But that doesn’t mean it can’t or won’t happen.
I’d like to see BTCUSDT close the day above $66,000 to stay constructive in the short term. A close below that level would flip it back to resistance.
As you can see by today’s candle, there’s a confluence of support around $63,000, which is an area I’ve discussed for the last week.
ETH was showing a nice stair-step pattern. I say “was” because today’s close could put an end to it. A daily close below $4,600 could introduce some weakness.
Below $4,600 is $4,400 and $4,200.
I still think ETHUSDT has a shot at making it to the $6,000 – $6,500 measured objective in November as I’ve discussed, but only if this rally remains constructive.
VET is testing the $0.155 region as support today following the selloff from Bitcoin.
In a lot of ways, $0.15 is a must hold level. A daily close below that would flip it to resistance and expose $0.14.
The area just below $0.19 remains resistance for VETUSDT. You can see how the market found selling pressure there during Tuesday’s session.
Kitty Inu (kitty)
Kitty Inu (kitty) is a token that I first mentioned in late October when trading at a $65m fully diluted market cap.
Today, the market cap is sitting at $122m. And over the weekend, it was above $200m.
But kitty is just getting started, in my opinion. They have a play-to-earn game in the works, and they just announced yesterday that they’ve partnered with The Culture DAO to bring Kitty Inu to life.
That entails things like bringing AI and NFTs together so you can interact with the character in the metaverse. They also have other DeFi utilities planned for the token in the coming months.
Combine that with aggressive marketing, experienced developers, a BSC bridge that’s in the works, the same designer as SHIB, and you have a recipe for success, in my opinion.
As always, this is not financial advice, and you should only risk money you can afford to lose.