Issue 120 – Sorry Crypto, the Dollar Still Matters

November 24, 2021


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Happy Thanksgiving to those of you in the US!

Today’s issue discusses the impact of the US dollar on the cryptocurrency market, and what levels I’m keeping an eye on in the coming weeks.

I’ll also share updates on TOTAL, BTC, ETH, and VET.

Let’s get it!


It’s (Still) All About the Benjamins

The last week and a half in the crypto market has largely been a story of US dollar (DXY) strength.

I’ve discussed the DXY both here and on Twitter for the last month. I was ridiculed at first for talking about a fiat currency. However, I think many in crypto are now understanding that the USD still matters.

It’s no coincidence that Bitcoin has suffered since November 10th, which is the exact day the DXY had its breakout rally above 94.60.

DXY (daily time frame)

Since that time, we’ve seen the DXY and BTC diverge.

So it goes without saying that the US dollar needs to back off for BTC to gain any meaningful strength. Unfortunately, I think we continue to see Bitcoin struggle while the DXY is this strong.

That brings us to some resistance levels for the DXY. One, in particular, could even trigger a full-on reversal.

The first more minor level is 97.50. This is really an area of resistance as the price action here in 2018, and 2019 was incredibly choppy.

However, the more significant area of resistance is closer to 99. That’s the underside of a 2011 trend line.

DXY (monthly time frame)

Could that be the level that triggers USD weakness?

It’s very possible. Dare I say likely?

If it is the technical catalyst for a move lower from the US dollar, then I think we see Bitcoin and gang strengthen around the same time.

And if it doesn’t trigger a bearish reversal from the DXY, then cryptos could be in a spot of trouble.

Total Crypto Market Cap (TOTAL)

The total crypto market cap is arguably one of the most underutilized and undervalued barometers for the crypto market.

While it is true that you can’t trade this chart, it does an excellent job of summarizing the crypto market into one visual.

So far, this entire pullback is nothing more than a rounded retest of the $2.4T support area, which is to be expected.

The market could also extend as low as $2.2T and still maintain its constructive appearance.

As long as TOTAL is above $2.2T – $2.4T on a weekly closing basis, I’ll remain bullish on the entire market.

Key resistance is the all-time high at $3T.

TOTAL (weekly time frame)

Bitcoin (BTCUSDT)

Bitcoin is trying to rally as I type this. However, it’s being held down by a short-term trend line off of the November 15th high.

As I mentioned yesterday, if BTC can get above this level, we’re probably looking at a run to $60,000. Above that, $63,000 is going to be crucial.

I think what happens at $63,000 could determine whether we see BTC rally above $70,000 in December or another leg lower.

Just keep in mind that BTC could move below $55,000 and still be bullish. As I mentioned today on YouTube, the must hold support level is closer to $52,000.

BTCUSDT (daily time frame)

Ethereum (ETHUSDT)

ETH is holding up relatively well. The market is still above the $4,000 area, and could technically move as low as $3,700 and still be bullish.

As for resistance, $4,400 and $4,600 are both key levels to watch. It’s going to take a daily close above $4,400 to expose the latter.

If ETHUSDT can get above $4,600 in the coming days, I think we see a new all-time high.

The area between $3,700 and $4,000 is key support.

ETHUSDT (daily time frame)

VeChain (VETUSDT)

VET is managing to hold above the $0.12 support area. However, as I mentioned a couple of days ago on YouTube, VETUSDT could move as low as $0.11 and still be constructive.

That said, I wouldn’t want to see VET close a week below this region as things could get ugly if it did. But, for now, the chart still looks good.

Resistance comes in at $0.15 and $0.19.

VETUSDT (daily time frame)

Justin Bennett

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About the Author

I'm Justin Bennett, a currency trader turned crypto enthusiast. My journey started with stocks in 2002. After limited success, I transitioned to currencies in 2007, which later became a full time trading gig. The journey continued, and in 2020, I committed to learning about cryptocurrencies. It was love at first sight. Cryptocademy.com is the culmination of my love for cryptocurrencies, my passion for financial markets, and desire to learn and teach.

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