Could Bitcoin’s Rally Be Short-Lived Amid Dollar Gains?

A crypto analyst, known as Bluntz, is cautioning that the recent market uptick might be a deceptive bull trap.

He suggests Bitcoin is showing bearish tendencies in the short term after failing to break past a key Fibonacci resistance level.

gut is telling me these early week crypto pumps might have been a trap.

had a good look at dxy and es today and gave myself a bit of a reality check.

weekly divs on both were confirmed and btc so far rejecting from the 0.618 fib pic.twitter.com/91J1XsLmlR

— Bluntz (@Bluntz_Capital) October 7, 2024

Fibonacci retracement levels help traders spot possible price support and resistance zones. Bluntz expressed concerns, hinting that the early-week gains across the crypto space could be misleading.

He noted that Bitcoin has struggled near the 0.618 Fibonacci retracement level, while other financial indicators like the US dollar index (DXY) and S&P 500 E-mini futures are pointing to potential downward pressure.

Bluntz pointed out that the DXY, which tracks the US dollar’s strength against other major currencies, has shown bullish signs on its weekly chart.

Historically, a rising DXY tends to negatively impact risk assets like Bitcoin and stocks, signaling that some investors may be shifting away from these assets in favor of the dollar.