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Bitcoin Elliott Wave Prediction & Cross-Asset Analysis


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In the financial landscape, several assets exhibit inverse relationships, providing investors with diverse opportunities for hedging and speculation. A fascinating correlation to observe is the way Bitcoin interacts with the USD Index (DXY), Bonds, and Yields, especially when examined through the Elliott Wave theory's lens.

Bitcoin and USD DXY: Over recent periods, Bitcoin and the USD DXY have demonstrated an inverse movement. Typically, in Elliott Wave terminology, when one asset is moving in an impulsive wave upwards, the other might be charting a corrective wave downwards. At present, it seems that when Bitcoin embarks on a bullish cycle, the USD shows a bearish tendency and vice versa.

Bitcoin and Yields: Historically, yields top out when there's confidence in the economy and when central banks anticipate higher inflation. A rising yield environment might signify an aversion to riskier assets like cryptocurrencies, resulting in an inverse relationship between the two. With the current Elliott Wave count suggesting we might be in the phase iii) of A of either (B) or (2), this could be a pivotal moment to watch. If yields peak in sync with a USD upturn, it might signal a temporary downturn for Bitcoin.

Bitcoin and Bonds: Bonds, much like Bitcoin, act as a hedge against market uncertainties. However, in the current Elliott Wave framework, it's implied that as the yields peak and USD strengthens, bonds could see a dip, indicating they're bottoming out. In this scenario, with bonds at a low and Bitcoin potentially retracting due to a stronger USD and higher yields, it creates an intricate cross-asset dynamic.

To encapsulate, while Bitcoin remains a dominant force in the cryptocurrency space, its price movements are closely intertwined with traditional assets. The Elliott Wave count - iii) of A of (B) or (2) - hints at potential pivotal shifts in the financial markets. Traders should remain vigilant, analyzing these cross-asset relationships for informed decision-making.

Analysis provided by Peter Mathers of TradingLounge™ - Australian Financial Services Licence - AFSL 317817.

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