The Bitcoin price (BTC) was supposed to maintain the critical support level between $ 11100-11300, and it did. After testing this support, the BTC price continued to rally on October 20, reaching a critical resistance zone between $ 11900-12200.

This upward movement coincided with the weakening of the dollar as the DXY fell significantly. The link, and is already valid in 2020.

However, other cryptocurrencies have not followed in Bitcoin’s footsteps as they sell cryptocurrencies heavily. Is attention shifting back to Bitcoin?

The week shows a very important level that has been an obstacle for Bitcoin in previous years. This is a resistance zone between $ 11700-12300. If this level is broken higher, it will probably be a strong move towards $ 17,000.

It can also mean the start of a new cycle, with more and more arguments put forward at the start of a new bullish cycle.

However, this does not mean that penetration is unavoidable, as the hull is ready for movements with a more limited range. The main argument in favor of that bullish outburst will be the weakening of the US dollar.

The US dollar is showing weakness after the huge crash in March 2020, which gave gold, silver and bitcoin prices higher.

DXY is a good indicator to gain momentum from other safe assets such as gold, silver and bitcoin. Of course, when markets are hit by a particular crisis, a flight in cash and dollars is expected.

Recently, however, the dollar has run out. One of the main arguments in favor of this DXY relief is the Fed’s Infinite Quantitative Easing, which announces trillions in new stimulus packages.

As the dollar showed weakness, Bitcoin continued to rally after marching. Similarly, the US dollar index fell to 94.64 points in recent days and continued its free fall.

The last support level is the 93 beep area. Should this be lost, there will inevitably be new downturns for the US dollar index, which will only add speed to Bitcoin.

As the chart shows, the dollar has shown weakness since the Dot.com bubble burst and began to recover actively.

During this period, the strength of gold increased and the price rose 600% in the midst of the weakening of the US dollar. In the first part of the crisis (2000, when there was also an increase in liquidity), gold fell 30%, but the strength increased after this autumn.

This connection was also seen in Bitcoin recently, as Bitcoin has moved step by step with gold in recent months. It can be concluded that investors are looking for safe assets as a hedge against the weakening of the US dollar.

Bitcoin’s last move is to crush altcoins. It does not matter if BTC rises or falls. Alternative currencies are falling like rocks.

This is not exactly a strong signal for the markets, as it indicates that the focus is on Bitcoin. The moment Bitcoin rises, when altcoins are sold, means that money flows from altcoins to Bitcoin. If that happens and Bitcoin takes a small step, little power will emerge.

As a result, markets move cyclically, and the fourth quarter of the year is usually a bad quarter for altcoin investors. History shows that the Bitcoin dominance chart rose in the quarter and peaked in December.

This chart is in line with Ethereum (ETH) versus Bitcoin, as it often is in late December.

Going forward, it is very likely that Bitcoin’s market dominance will continue to grow and altcoins will continue to sell. The most important indicators for the markets in the short term are the strength of Ether and thus digital currencies against Bitcoin and the general changes in the US dollar index.

Source: CoinTelegraph

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