A much-followed crypto analyst is updating his view on the markets after a huge week of gains for digital assets.
Crypto trader Justin Bennett tells his 112,400 Twitter followers that now is not the time to go long on Bitcoin (BTC).
“BTC is most likely a flush of late longs here.
Certainly not what you want to yearn for Bitcoin, in my opinion.
In the context of trading, a “long” refers to a position that is expected to increase in value. A trader who is “long” on an asset is betting that the asset’s price will rise.
BTC is worth $30,563 at the time of writing, up more than 19% in the past week.
Next, Bennett looks at the US Dollar Index (DXY), a measure of the value of the US dollar against a basket of six major currencies. When the DXY is strong, it is often seen as a sign that the US economy is strong and that the US dollar is a safe haven. This could lead to selling pressure in cryptocurrencies as investors shift their money to the US dollar.
According to Bennett, the DXY is about to become even stronger.
“Get bearish on the DXY if you want.
I still think we have a rally to fill last year’s imbalance at 109-110.
Finally, Bennett looks at two major stock indices: the Dow Jones index (DJI) and the S&P 500 index (SPX). Looking at the two traditional stocks, Bennett appears to be betting on short-term weakness.
“Not a good idea for stocks if the Dow Jones can’t hold this level…
SPX is still coming out of channel resistance at 4,430.
I would like to see a break below 4,325 to confirm the fakeout and give us a nice risky move to play next week.
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Featured image: Shutterstock/Tithi Luadthong
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