Bitcoin traders and enthusiasts have been eagerly anticipating the next significant move in the cryptocurrency market, with memories of the 2019 fakeout rally still fresh in their minds.
However, one prominent BTC trader, known as Dave the Wave on the social media platform X, is offering a reassuring perspective. According to Dave, the conditions that led to the 2019 fakeout rally are unlikely to repeat themselves in the current market cycle.
The 2019 fakeout rally left many Bitcoin investors disappointed. It was characterized by a sudden breakout that sent BTC prices soaring, only to see them crash back down just as rapidly.
This roller-coaster ride was attributed to Bitcoin spending only a short time in the “buy zone” before experiencing the wild price swings.
Those that have followed me for some time may remember my calling of the 2019 #btc spike as a ‘mini bubble’. This was based on the LGC model, where price moved too quickly/ parabolically out of the buy zone.
This time, no such thing. Even if prices should decline a little more… pic.twitter.com/1o4CETVcBf
— dave the wave???????? (@davthewave) September 26, 2023
The Promise Of A Sustained Bitcoin Bull Rally
Dave the Wave, a trader known for his insightful analysis, suggests that this time is different. In contrast to 2019, Bitcoin has spent more than a year within the buy zone, setting the stage for a more sustained bull rally.
He supports this assertion with technical analysis, particularly the monthly moving average convergence divergence (MACD), a momentum indicator that can signal a reversal in an asset’s trend.
“Those that have followed me for some time may remember my calling of the 2019 BTC spike as a ‘mini bubble.’ This was based on the LGC model, where the price moved too quickly and parabolically out of the buy zone,” Dave stated. “This time, no such thing.”
BTC market cap currently at $527 billion. Chart: TradingView.com
As of the latest data, Bitcoin is trading at $27,091.02 via CoinGecko, reflecting a 2.7% increase in the past 24 hours and a 1.6% gain over the last seven days.
Despite recent struggles to stay above the $30,000 mark, the cryptocurrency is still showing a bullish reversal trend when considering its performance throughout this year.
Dollar Strength And Bitcoin’s Prospects
However, there’s a notable factor at play: the strength of the US dollar. The US dollar strength index (DXY), which gauges the greenback’s performance against a basket of major foreign currencies, has recently reached its highest level since November 2022.
What’s intriguing is the inverse relationship between the DXY and Bitcoin in 2023. If the dollar continues to strengthen following the DXY’s golden cross, it could limit Bitcoin’s upside potential in the coming months.
In a market characterized by its unpredictability, traders and investors will keep a close watch on Dave the Wave’s insights and the evolving relationship between Bitcoin and the US dollar.
As the cryptocurrency market continues to mature, it remains to be seen whether Bitcoin’s current stay in the “buy zone” will indeed pave the way for a sustained bull rally, or if new market dynamics will emerge to challenge this prediction.
Featured image from iStock