BTC/DXY: Roadmap of April's BTC blow-off top?

Further to the linked analysis, here is a closer look at the moment in DXY's chart that I think BTC is currently undergoing.

In essence, DXY is broadly inversely correlated to the BTC chart. But there also appears to be a time lag in the price action.

Again, see linked analysis.

BTC is currently running around 96 days +/- behind the DXY chart.

(I'm not a BTC bear, by the way — in case that needs to be said.)

If find time, I'll try to post a chart based on an isolated analysis of BTC where I see the top of the current bull run coming in at around 74-80k.

Accepting this as a rough assumption, I can see in the inverted BTC to DXY comparison posted yesterday, while taking into account the time lag, that we may be at the December 2020 upside retracement on the DXY chart.

For BTC, this would spell a dip, because their correlation is inverted.

So I wanted to take a closer look at this exact moment on the DXY chart, and compare to BTC now, if we change the time alignments.

This is what the chart above shows.

A few things to note:

1) Between 04 December and 17 December, DXY, on the inverted chart, prints an over-extended W formation. This is exactly what BTC did between 21 February and 14 March.

2) Note that DXY, like BTC, went through the 0.786 Fibonacci retracement on the initial downside (in BTC's chart) / upside (in DXY's chart, here inverted) impulse. So BTC printed a higher ATH, and so did DXY, if inverted. Right way up, this was a lower low for DXY.

3) Usually we expect the W formation to complete at the neckline. BTC failed to do that on 16 March. We have just seen now (25 March) that pattern complete. Usually we want to see a candle body reach the neckline, rather than a wick alone.

4) DXY completed the W formation in one movement, 21 December. BTC took two attempts.

5) Note that DXY, after completing the W formation, reached down again 22 December for a double tap on that neckline, before continuing (on an inverted chart) to the upside. It's hard to say whether BTC will touch again the neckline of the W formation it printed, but it wouldn't surprise me. The neckline is around $51k.

6) The top for DXY (on the inverted chart) came in at 6 January. This suggests a possible blow-off for BTC in early to mid-April. From 6 January, on the inverted DXY chart, it was a slow descent until now. Right way up, DXY is strengthening. See the linked analysis for the macro fractal it may be repeating. If this plays out the same for BTC, it will be the descent into the bull market.

7) In terms of immediate concerns: a) BTC may again test the $51k level; b) the top of BTC's bull run is very close. What is really in play is less where the top lands, but what is the exact time lag between BTC price action and DXY.

Please comment. I'd love for someone to come in with technical analysis that demolishes the suggestions above.

Comment:

NOTE: In Point #6 above, it should read, "If this plays out the same for BTC , it will be the descent into the *bear* market."

Comment:

31 Mar 2021 15:20:32: Interesting to watch today's rapid drop from $59.8k to $56.7k, touching the 10 EMA on the daily chart. The last time BTC did this kind of liquidity grab during an upside movement was 8 February when, curiously enough, TSLA announced its $1.5bn BTC buy. While there was a long wick as BTC passed the 0.786 of the Fibonacci retracement on the 21 February downside impulse (10 March), BTC today had to make this grab even as it only touched the 0.786, which it hasn't yet broken through. BTC is losing momentum on the macro level. In other news, the low from the previous ATH came in at around the 0.5 Fibonacci of the 21 February downside impulse, so we can probably expect that the next lowest low from BTC's hike to $65k, which should be its next higher high, will be $56k.