Price and dominance of Bitcoin surge. Where are we heading?

Amidst strong global tensions, Bitcoin is showing what it's made of.

Oct 28, 2023

Welcome to MrGekkoWallSt's virtual office!

This is edition number 07 of my newsletter! Here, I organize and share my insights on the market, technical analysis, education, experiences, reflections, and the most relevant news of the period.

Reflection:

It's amazing how Bitcoin is behaving in the face of global tensions this October, isn't it?

It's a shame what's happening in the East; it truly is one of the most heartbreaking tragedies of recent times.

It's important not to lose our sensitivity, not to dehumanize, the ability to recognize barbarism, brutality regardless of the side, and not consider it normal is an evolutionary achievement of civilization. Let's take a moment to reflect!

We should continue the evolution of our species in society; let's do our part. I'm eager to share observations I've made about Bitcoin and the market during the week.

Stay with me until the end!

In this week's analysis, I will address:

Short-term behavior of the dollar index (DXY);
Upward trend on the Bitcoin dominance chart;
Fibonacci retracement levels on Bitcoin.

Dollar Index (DXY)

If you haven't seen it yet, I suggest you check out the long-term analysis of the dollar index in the newsletter 03.

In the short term, the index shows a potential peak (B) around 107,000 points.
On the daily chart, there is a distribution, with Fibonacci retracement levels being respected.
It's important to pay attention to this setup, as if time confirms a distribution, its negative effect could intensify the downtrend in the dollar index over larger timeframes and scope.

Bitcoin Dominance Chart

Recently, Bitcoin dominance broke its previous peak (around 52%) in the year 2023.
Since then, the price of Bitcoin has started a new uptrend and surpassed $32,000.00, which had also been the highest price of the year.
Please take a look at the current resistance (1) on the chart. Notice that resistance (2) is close to 60%.

Bitcoin

Levels above $35,000 dollars have been reached, but currently, the asset has encountered resistance in this area and is undergoing a correction. It's important to keep an eye on the green support zone.

Pay attention to the Fibonacci retracement levels:

0.382 ($35.991.47).
0.5 ($42.337.39).
0.618 ($48.683.32).
0.786 ($57.718.19).

Final Thoughts:

The breaking of this year's high, both in Bitcoin's price and dominance, may be signaling the beginning of a new paradigm in the cryptocurrency market.

If dominance continues to rise, it's likely that the price will also go up, as an increase in Bitcoin dominance indicates that it is in higher demand compared to other cryptocurrencies, receiving more capital inflow.

This is a typical pattern in the capital flow cycle in the crypto market, observed in the early and intermediate stages of a bull market. However, caution is advised, as there is significant support at $32,000 that could be tested at any time.

On the other hand, the US dollar index continues to show signs of weakness, which can be a positive factor for liquidity to flow into equities and consequently into Bitcoin.

The narrative of the ETF as a justification for this rise remains strong, with rumors of approval earlier than expected by the market. I'll address this topic soon; subscribe to stay updated.

Relevant News:

Macroeconomy:

Cryptocurrencies:

Disclaimer:

This is a newsletter where I publish my unbiased analyses and considerations that should not be taken as advice or recommendations. I do not provide financial recommendations for buying, selling, or holding assets, and I do not promise quick wealth. You should conduct your own analysis and decision-making. I believe that knowledge is the key to the financial market, and I am committed to sharing insights that can help you see the market from different angles. If you're not already following this newsletter, consider subscribing. Every week, I share my analyses, experiences, and the most relevant news of the week. Let's investigate the fundamentals, charts, and gather the most valuable insights from the financial market!