Understanding the US Dollar’s Role

The US dollar is the world’s dominant reserve currency, meaning it is widely used in global trade, investments, and as a store of value. Many central banks and financial institutions hold large reserves of US dollars, reinforcing its importance in international finance. However, concerns over rising inflation, growing national debt, and potential shifts in geopolitical power have led some to question the long-term stability of the dollar.

In this context, a “US dollar crisis” could refer to a significant decline in the dollar’s value, loss of confidence in the currency, or even a shift away from the dollar as the global reserve currency. If such a crisis were to unfold, individuals and institutions might seek alternatives to protect their wealth—potentially turning to crypto.

Crypto as a Hedge

One of the core appeals of cryptocurrencies like Bitcoin is their independence from traditional financial systems. Unlike fiat currencies, cryptocurrencies are decentralized and not controlled by any central bank or government. This makes them attractive to those who are concerned about inflation or currency devaluation, as well as those who wish to maintain financial sovereignty.

In the event of a USD crisis, cryptocurrencies could serve as a hedge against the declining value of the dollar. Much like gold has historically been viewed as a safe-haven asset during times of economic uncertainty, digital currencies may increasingly be seen as an alternative store of value. The limited supply of assets like Bitcoin, with its capped supply of 21 million coins, contrasts sharply with the ability of central banks to print more money, which can erode the value of fiat currencies.

Increased Demand for Crypto in Times of USD Crisis

USD crisis could trigger a flight to alternative assets, including cryptocurrencies. As people lose confidence in traditional financial systems, they may look for digital assets that offer greater autonomy and security. This could lead to increased demand for crypto, driving up their prices and potentially sparking a broader adoption of digital currencies as part of mainstream financial portfolios.

Additionally, a dollar crisis could accelerate the development and adoption of decentralized finance (DeFi) platforms, which operate independently of traditional banking systems. With DeFi, individuals can borrow, lend, and trade assets without intermediaries, further insulating themselves from the effects of a dollar decline.

Potential Barriers to a Crypto Boom in the USD Crisis

While a USD crisis could theoretically boost the demand for cryptocurrencies, several barriers remain. Crypto is still relatively volatile compared to traditional currencies and assets. While this volatility can lead to significant gains, it can also pose a risk to those seeking stability during times of economic uncertainty.

Regulatory concerns also play a role. Governments around the world are paying increasing attention to cryptocurrencies, with some enacting stricter regulations to prevent money laundering, fraud, and tax evasion. In the event of a US dollar crisis, governments may seek to impose further controls on crypto markets to maintain financial stability, potentially limiting the extent of a crypto boom.

Furthermore, for crypto to truly become a safe haven, improvements in infrastructure and usability will be necessary. As more people enter the market, crypto platforms, and exchanges will need to scale to accommodate greater demand while ensuring security and ease of use.

The Global Context

It’s important to consider the global implications of a US dollar crisis and how different countries might respond. In regions where confidence in the local currency is already low, cryptocurrencies have seen increased adoption. For example, in countries experiencing hyperinflation, such as Venezuela or Argentina, citizens have turned to Bitcoin and other digital currencies to preserve their wealth.

A similar dynamic could play out on a larger scale if the US dollar were to experience a significant decline. Crypto could become a more attractive option for people in countries that rely heavily on the US dollar for trade or as a reserve currency, accelerating global adoption.

Conclusion

While it is impossible to predict the future with certainty, a US dollar crisis could be a catalyst for increased crypto adoption. As a decentralized, deflationary asset, crypto offers an alternative to traditional financial systems and may serve as a hedge against the potential risks posed by a weakening dollar.

However, for a true crypto boom to occur, the market must overcome several challenges, including volatility, regulatory hurdles, and infrastructure limitations. Nonetheless, the increasing integration of cryptocurrencies into the global financial system suggests that they may play an important role in the event of a US dollar crisis, offering individuals and institutions a way to protect and diversify their wealth.

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The post How a USD Crisis Could Accelerate the Rise of Crypto appeared first on Coinrule.

Continuing with our new technical indicator offerings, Bollinger Bands are now live on Coinrule!

What are Bollinger Bands?

Bollinger Bands are among the most famous and widely used technical analysis indicators. They were created by John Bollinger in the early 1980’s. A Bollinger Band is a technical analysis tool defined by a set of trendlines traditionally plotted two standard deviations (positively and negatively) away from a simple moving average (SMA) of an asset’s price. The SMA (the middle line) then serves as a base for the Upper and Lower Bands which are used as a way to measure volatility by observing the relationship between the Bands and price. When the Bands are converging and the gap between them is small, it indicates that volatility is low and that a breakout could be imminent.

Determining breakout direction 

Determining the breakout direction is somewhat more challenging. John Bollinger suggests using a combination of other indicators, such as the RSI, in conjunction with his Bands to try and identify the breakout direction.

Additionally, if there is a positive divergence, that is if the indicators are heading upwards while the price is heading down (or staying relatively stable), it is a bullish signal and hence an upwards breakout is more likely. Conversely, if the price is moving higher but the two bands are displaying negative divergence, a downside breakout is the more likely scenario. Other important signals can come when the price breaks the Upper and Lower Bands. When the price breaks the Lower Band, it can act as a buy signal and the opposite is true when the price breaks the upper band. Let’s take a look at an example:

In the above example, the tightening of the Bands provided an indication that a breakout could be imminent. When the price broke the lower band, it would have been a great buying opportunity as there was a massive upwards breakout following this signal. 

Check out some of our Bollinger Bands templates to get started with building this indicator into your strategies. 

We hope you enjoy the new features. Happy trading!

The post Bollinger Bands are Live on Coinrule! appeared first on Coinrule.

A sigh of relief could be heard resonating through the blockchain as the market’s down only streak of 9 consecutive weeks ended as the weekly candle closed green on Sunday night.  This begs the question: have we found our bottom or is this a relief rally before another leg down? Bitcoin dominance has surged to 47% from the January lows of 40% – showcasing the flight to safety in the market over the past several months, or the exit of liquidity from alt coins and the crypto markets in general. 

Bitcoin has found support around $28,000, this happens to also be the Fibonacci golden ratio 0.618 retracement level – a potential signal that an interim bottom has been found.  However, with the Fed having started quantitative tightening on June 1st, the impact of the $95 billion worth of debt securities the Fed has stated they will sell each month has yet to be truly felt.  This unwinding by the Fed will push risk assets lower as economic activity slows and liquidity shrinks in an attempt to combat high inflation. 

When hypothesising where another bottom could be it is worth taking note of location of the 200 week moving average (WMA). The 200 WMA has proven to be a reliable indicator of regional bitcoin bear market bottoms.  In 2015 bitcoin bottomed out and found support on the 200 WMA at approximately $200.  In late 2018, bitcoin again bottomed and found support on the 200 WMA at $3,150.  In the Covid crash of march 2020 bitcoin retested the 200 WMA, but briefly broke through for a week at $5,500 – ultimately reaching a low of approximately $3,800.  Today, the 200 WMA sits at $22,300.  Could this be the next bitcoin floor?

In confluence to the current location of the 200 WMA, the On-Chain Cost Basis of bitcoin is currently $23,800.  Historically, buying in both the 200 WMA and the region of the On-Chain Cost Basis has been very attractive from a risk/reward perspective. Conversely, these times are often when it feels like crypto is finally all over and takes some serious psychological strength to press the green button.  The last time bitcoin entered this region was during the Covid crash of March 2020 and ended up being a supreme buying opportunity for the investors brave enough to take it during peak market capitulation and fear, resulting in bitcoin trading below $6,000 for a week.   

This week, Bitfinex longs also reached an all time high with approximately 90,000 BTC contracts equating to $2.7 billion.   The previous all time high of approximately 54,000 contracts was 22 July 2021, which marked the beginning of bitcoin’s ascent to a new all time high.  The question is: are these traders simply hedging having already liquidated their spot positions? Or more optimistically, are they doubling down with the expectation of history repeating itself, as they predict the tides turning and the bitcoin bottom having passed?  

Regardless of if the bottom is in or more downside is on the horizon, market participants who dollar cost average at these levels will most likely experience a profitable endeavour if their time horizon is several years.  As a wise investor once said “it’s time in the market, not timing the market”.

The post Phew! No 10 In a Row appeared first on Coinrule.

Halloween is that period of the year when streets are full of ghosts and monsters. At a closer look, they are just kids asking for candies. If you look closely at the latest “spooky” Bitcoin’s dip, you will find many bullish elements as well.

As anticipated, the market was looking for a retest of the first support area . During a retest, the magnitude of the price move does matter! This week Bitcoin dipped below the psychological level of $60,000 just to find another support right above the previous consolidation area.

The price then rebounded back above the breakout level. This kind of price action implies a solid amount of buyer and demand. On the other hand, sellers may not have been satisfied by such a meagre drop from all-time high. Should they manage to push the price to a new lower low, that would open to a more severe drawdown that will allow them to buy back at more convenient prices. The fight is on, and it could lead to a period of sideways moves between $57,000 and $64,000.

What about Alts? They will undoubtedly be those that will benefit the most from this scenario. The rally of Altcoins in BTC prices started precisely at the top of the latest Bitcoin’s run. As the trend began to weaken, investors and traders rotated back their allocation in Alts.

How long will this Alt-party last? Time will tell. Meanwhile, it’s worth continuing to keep an eye on the Bitcoin Dominance chart compared to Bitcoin’s price. This is the single best indicator to optimise your portfolio allocation and boost your returns in times of lower volatility .

The post Trick or Treat appeared first on Coinrule.

The market always fills the gaps.

Gaps are not common in the crypto market. But, as Bitcoin gain mainstream adoption and more investment vehicles get listed on traditional financial markets, these elements can play a relevant role in how its price moves. Gaps signal strong price reversals and point at suitable price levels that traders can use as support and resistance .

The chart shows the Bitcoin future price as it traded on the CME . The gap around $60,000 in April marked the local price top. The price retested immediately the same level after, and when it failed to break out, the trend lost steam and reversed.

The same is happening these days, the other way around. After breaking above, pushing Bitcoin to a new all-time high, the price pulled back to retest the buyers’ confidence. Should the price hold, the road to $100,000 will be smoother.

Be patient. The chart also includes the other three relevant gaps in the market. Keep them in mind as guidance to place your stop losses. Bonus fact, the BTC ETF is already driving up significantly the trading volume , making this chart always more significant from now on.

The post Mind The Gap appeared first on Coinrule.

China bans (once again) crypto activities, and only news outlets seem to care about it. The Crypto market reacted differently.

A positive reaction to bad news is one of the most bullish signals experienced investors wait for to assess the market’s mood. You could argue that China’s FUD is now almost no news anymore, but it can always represent a new opportunity for speculators to push the market lower.

The market barely reacted to the news, and it remains in pause mode before moving to the next phase. Looking at the broader picture, you can see how the market moves in cycles, which last on average two to three months.

The chart shows how Bitcoin’s price (orange line) and dominance (blue line) evolved over the last year. By combining both trends, you can evaluate how to optimise your portfolio allocation and what strategies could work better in the next couple of months.

Should the sequence of market phases start back from October 2020, Altcoins may significantly underperform Bitcoin . In perspective terms, Bitcoin Dominance is currently sitting at record lows, which validates, even more, this thesis.

Time will tell, meanwhile better adopt a flexible approach and be ready to handle the next chapter.

The post Bad News, Good News appeared first on Coinrule.

The market is betting which project will be the Ethereum-killer. Solana, Terra, Avax and Cardano have been performing exceptionally well recently. Investors believe they will outpace the “old” Ethereum in the race of scalability of DeFi, bringing crypto to mainstream adoption.

Yet, Ethereum doesn’t seem to be giving up the throne anytime soon. Total value locked in DeFi protocols recently hit a new all-time high, and that’s mainly due to protocols running on the Ethereum network.

Looking at the ETHBTC chart, it’s clear how Ethereum is building a solid bullish momentum. On a higher time frame and on such a large time scale, moves like this happen for a reason. Ethereum has just become more scarce (following the EIP-1559 update), making it close the gap slightly with Bitcoin .

Supply and demand is always the main driver for price and a supply shrink coupled with growing adoption push immediately the price up. Not to mention the increasing number of coins staked in ETH 2.0.

Solana and other protocols are still good investment options that will likely outperform both Ethereum and Bitcoin . But they also carry higher volatility . From a risk-adjusted perspective, Ethereum is now flipping Bitcoin. Institutional investors have already realised that, so more smart money is likely to flow into ETH. Just wait for the next big headline.

The post The Great Flip appeared first on Coinrule.

The mood of the crypto market shifted from “a new bear market started” to “long live the bull market” in a matter of weeks.

Looking at the big picture of the crypto market capitalization starting from the bottom in March 2020, things become clearer. The excessive euphoria that grew during the first months of 2021 needed a reset. The RSI captured this general weakness precisely, with lower highs diverging from higher highs during the market trend.

It was easy to confuse the large crash in May with the beginning of a prolonged downtrend period. But as the market rebounded exactly at the bottom of the upward trend, investors and traders found the confidence to turn bullish once again.

The rebound also occurred at the 61.8% Fibonnaci level, enhancing the importance of that area as strong support in the future. In the short term, 23.6% is the first support in case of a pullback. Consolidation in the green box would be beneficial for the long-term development of the trend. Should Bitcoin cool off below $50,000, that could be a good opportunity for Altcoins to have their moment of glory .

Accumulating on dips and scalping long strategies are still the best way to capitalize on the current market condition. The trend is always your friend, after all!

The post Back on Track appeared first on Coinrule.

As the crypto market consolidates after a raging bull run, traders scramble to see where the chips have fallen. Lets compare ETH vs BTC

An interesting chart to look at is ETH vs BTC . Now that the initial excitement is wearing off, it is perfect for recalibrating and considering a longer-term perspective. Here, we see the last four years of the ETH/BTC chart. We see that during crypto booms, ETH outperforms BTC . However, most of the time, ETH/BTC generally trades lower than where it currently is and seems to revert to its mean eventually.

The current level is where ETH historically failed to hold onto its gains multiple times in the past. This time seems to be a different story, as the support is holding well despite the brutal recent sell-off. It’s worth noticing that the chart presents a series of lower highs during the previous cycle, while this week, the price could print the first-ever higher low above this crucial level.

On the other hand, the trading pair is still trading well below the all-time high valuations of 2017 and 2018, and that should pause caution for investors. Keeping an eye on this chart will provide valuable insights into the best time to rotate the portfolio again from Bitcoin into Altcoins.

For all investors on their crypto trading bot journey, watch out for some exciting times ahead.

The post The Great Comeback appeared first on Coinrule.

Technical analysis is a handy tool for traders, but the truth is that it’s not an exact science.

If it were, reading a book would make you a professional trader. Chart patterns may appear different to the eyes of each analyst based on their biases. The first step is to try setting aside as much as possible any belief you can have about where the price is heading next and focus as much as possible on objective elements. This is necessary to use Technical analysis appropriately,

Let’s try to apply this method to Bitcoin’s chart. As time passes, the chart seems to be more likely on the verge of another significant drop. Since June, the price has posted lower highs, while the horizontal support is holding. The question is, for how long? Some traders have raised the idea that Bitcoin is building a massive head-and-shoulders pattern.

For how bearishBitcoin may look like, the good news is that this is not an H&S formation. The “head” is atypical, but what is even less common is how the volume develops. To be a valid H&S , the volume should be higher on the left shoulder and decreasing after that. Conversely, Bitcoin’s volume has been higher on the right shoulder, indicating high interest both for buyers and sellers around those levels. Another good news is that Bitcoin broke up from a similar accumulation period at the beginning of the year.

The post Make No Mistake appeared first on Coinrule.