Bitcoin bulls should be wary of the Dollar Index's death cross: Technical Analysis | CoinDesk JAPAN

• Bitcoin bulls expect that the depreciation of the Dollar will boost the cryptocurrency market in the second half of this year.
• The weekly chart of the Dollar Index suggests the possibility of a "dead cross." This has traditionally been a bearish signal, but it has consistently indicated a bottom since 2009.

However, there is one chart that one should be cautious of when relying on the bearish forecast of the Dollar. It is the weekly chart of the Dollar Index. The 50-week Simple Moving Average (SMA) is expected to soon fall below the 200-week SMA, forming the infamous death cross.

This ominous pattern is widely recognized as a long-term bearish signal, but historically it has proven to be a bearish trap, consistently indicating the bottom of the Dollar and a bullish trend reversal.

The following chart shows that the Dollar Index has recorded four dead crosses on the weekly chart since 2009. Each of these dead crosses indicates the end of a downtrend (shown by vertical lines) and set the stage for a sharp rise.

[Dollar Index Weekly Chart (TradingView/CoinDesk)]The last dead cross occurred in January 2021, and the Dollar Index bottomed around 90. The dollar was bought over the following months, eventually reaching a high of over 114.00 in September 2022.

Price patterns do not always unfold as expected, so it is important to note that an impending dead cross does not necessarily mean a bearish trap. However, by understanding past trends, traders can manage their positions more effectively.

The Dollar Index fell by 10.78% in the first half of this year, marking its worst performance since 1991.

| Translation & Editing: Rina Hayashi | Image: sergeitokmakov/Pixabay
｜Original: Bitcoin Bulls Should Be Wary of the Dollar Index’s Death Cross: Technical Analysis

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