How Gold And The Dollar Could Validate A Bitcoin Bull Run

Bitcoin price is back above $30,000 per coin, but the market is still in disbelief, skeptical that a bull run is back across crypto.

However, updated monthly charts for Gold (XAU) and the US dollar via the Dollar Currency Index (DXY) could provide early confirmation that something special is brewing.

All That Glitters Is Not Gold: Why Bitcoin Is Ready To Shine

Beginning with the precious metal once backing the entire financial system, let’s take a closer look at the long-term Gold versus Bitcoin chart.

BTC is becoming more expensive priced in gold | XAUBTC on TradingView.com

Observing the 1-month XAUBTC chart above, which quotes the price of Gold in Bitcoin, we can see that the June monthly candle is pushing beyond the Bollinger Band basis line.

The Bollinger Band basis is a 20-period simple moving average, and each Bollinger Band is set at two standard deviations of the SMA. The two bands expand and contract with volatility.

Historically, when XAUBTC closed below the basis, price moves on to tag the lower Bollinger Band. At current levels, this would result in a new all-time low on the chart and a new all-time high in BTC priced in troy ounces of Gold.

The DXY versus BTCUSD looks like gold | DXY/BTCUSD on TradingView.com

Dollar Index Begins Plunge Against BTCUSD

In the chart above, the Dollar Currency Index (DXY) is put up against BTCUSD for yet another alternative look at the crypto market compared to major macro assets. The DXY is a basket of top currencies trading against the US dollar

Much like the Gold chart from earlier, price is pushing beyond the Bollinger Band basis line discussed above, also referred to as the “mid-BB.”

However, unlike XAUBTC, the DXY/BTCUSD chart shows several months of consolidation below the basis. This potentially suggests the basis line has been confirmed as resistance.

In the past, this also led to a push to the lower Bollinger Band, which should equate to new all-time lows on the not-often-used ratio. Since the DXY represents strength in the dollar, such a scenario could ultimately suggest new all-time highs in the standard BTCUSD chart is ahead.

This chart originally appeared in Issue #9 of CoinChartist (VIP). Get 10% off a year subscription with this link: https://coinchartist.substack.com/BITCOINIST