Bitcoin is trading at over $20,000, but the start of what might be the first real correction since the uptrend first began could be forming. However, looking more closely at the DXY Dollar Currency Index, the leading cryptocurrency by market cap could be in for another extended bear phase if a fractal on the dollar chart plays out.
Could fear related to the newest strain of the coronavirus and more potential lockdowns cause another Black Thursday-style flight to the dollar?
Bitcoin Safe Haven Narrative In Jeopardy If Greenback Momentum Shifts
2020 has been the year of the great search for the next safe haven. When the pandemic first struck, and panic took over markets, investors cashed out assets to the safest haven currently known to man: the US dollar.
As the global reserve currency and due to its general stability, it is considered a safe haven asset alongside the Swiss franc and Japanese yen. Outside of fiat and forex currencies, precious metals enjoy safe-haven status, and both gold and silver are shining examples – figuratively and literally – of strong performance during economic uncertainty.
But for the first time in history, Bitcoin was also part of the conversation surrounding safe havens, thanks to the cryptocurrency’s digital scarcity and attributes that make it an ideal store of value.
Gold set a new all-time early in the year, but after that, it has been all about Bitcoin. The cryptocurrency is up 500% in 2020 alone from the Black Thursday low, crushing the performance of all other safe-havens.
But with fear and uncertainty back because of a new, more contagious, mutant strain of COVID called VUI–202012/01 or lineage B.1.1.7, Bitcoin is already pulling back, and the dollar is reawakening, according to the DXY Dollar Currency Index.
Bitcoin price action is layered behind the detailed technical chart of...