The crazy correlation between BTC and DXY (Dollar Index) seems to be playing out right now identically as it did during previous starts of bull markets.

There is a pretty large spectrum of assets and asset-classes outside of Crypto that show some big amount of correlation to Bitcoin. This can usually be used very well, especially to predict bottoms and tops as at the end all those assets are relieving mostly the same sentiments (apart from black swan events exclusive to crypto). Here it is the best to take the complete opposite asset to compare it to Bitcoin and not a very similar one like most do with comparing Stock markets and Crypto.

Here comes in the Doller Index (DXY) that had gained quite a lot of popularity during last year as even stock traders use it to predict their local tops and bottoms. The DXY is the very opposite to the stock market to sm it up, it pumps on news where the FED would need to act more to decrease inflation and on news of a possible recession.

Here is the comparison of the DXY to BTC:

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Chart from TATrader_Alan (Sorry for the colors, could not find a better one)

As we can see it is very clear that a rise of DXY meant a bear market for Bitcoin but also a top and then fall of by DXY was very bullish for BTC and usually meant the start of the bull market. BTC is very capable to form it bottom during the rise of DXY as we can see in 2018 but for BTC to enter as serious bull markt it need DXY to enter a bear market as we can see in 2020.

It is no secret that Bitcoin does show some correlation to stock markets as both are dependent on how much money consumers have left and in periods of recession they obviously do not have much thus the bear market. And then Stock markets are negatively correlated to DXY from where the negative correlation to BTC comes too.

Let me know, how YOU think this will play out: