DXY and Revised 2022 Road Map | Navigator
Review Date: June 11, 2022
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Market Update: DXY and Revised 2022 Road Map
DXY: Quarterly Chart
We are closing in on the end of the second quarter. This may be a good time to look at the 3-month Dollar Index (DXY) chart. There is a “teacup and handle” formation, which could drive DXY much higher. The DXY could climb from 104 to 142 over the next two quarters. This seems very negative for BTC and stocks until November.
The Euro and the Yen are crashing because of strange developments in the European and Japanese bond markets. This will eventually create a value proposition for crypto, but that is a long way off. In the meantime, the rising DXY will make American goods more expensive abroad. That will hurt stocks. The rising Dollar also hurts crypto. As the world moves to the Dollar as a haven, crypto’s rise as a new form of money is on hold until November.
Crypto: 2H Road Map
Looking at the ETH monthly chart, June, July, August, and September should all be down months. The bottom in ETH could be as low as $128. All the ETH used as collateral in staking pools, Defi, and stablecoin protocols is forcibly liquidated. The good news is that equities and crypto may decouple in October as equities free fall and crypto and gold rally.
Bitcoin dominance (BTC.D) is just starting a significant uptrend. BTC.D could rally from 48% to 71% by the time this down move is over in early November.
Here’s a proposed road map for ETH and BTC for the balance of 2022.
June 4 – June 23: ETH down $1,350 or 1050 – major liquidation event
Jun 23 – Jul 5: Relief rally in alts
Jul 5 – Jul 23: BTC crash. BTC catches up with alts on the downside.
Jul 23 – Aug 9: Rest (best time for vacation)
Aug 9 – Aug 29 “Rektember” starts in August; Two stable coins fail (USDT, DAI).
Bitcoin dominance goes from 47% to 71%
Sept 9 – Oct 5 Selling climax in BTC and stocks, Saylor and Musk liquidated
Oct 5 – Nov 5 Crypto and equities decouple (stocks down, crypto sideways/up)
Nov 5 A major crypto rally after final selling climax in stocks
Data as of 06/11/2022
Past performance not indicative of future returns
Bottom Line: Make sure you preserve capital to take advantage of the liquidation coming in crypto and stocks. Crypto is going a lot lower than anybody imagines. Most crypto may return to where the last rally started in July 2020. Do NOT underestimate the severity of this crash. In our view, this is not crypto winter. It is a sudden and brutal mass liquidation event.