A recent technical breakdown shared by cryptocurrency analyst Trader Tardigrade has added notable perspective to the discussion of how quickly Ethereum can enter a bull market, or how quickly it can enter a bull market. I hope there will be more integration in the future. In a post on X, he compares Ethereum to the USD index, then consults Perplexity AI, repeating reverse pattern It may now be starting to have an impact again.
Ethereum volatility is related to the dollar index
Trader Tardigrade Technical Analysis focus on inverse relationships Between Ethereum and US Dollar Index (DXY). The Ethereum monthly candlestick price chart shows that the price structure is stratified against the DXY movement, with four main phases where the dollar peak coincides with the Ethereum cycle bottom and the opposite dynamics also play out.
A quick look at the chart shows that the downtrend in DXY often coincides with the uptrend in Ethereum price. Perplexity AI explains: $ETH One of the most obvious inverse relationships with DXY in the cryptocurrency market, and in some cases More noticeable than Bitcoin.
As the dollar rises, funds circulate into assets that are perceived as safe havens and risk assets such as Ethereum. Face sales pressure. On the other hand, if DXY weakens, liquidity conditions will be eased, Drive inflow into cryptocurrencies Like Ethereum. According to the analyst, DXY has now broken long-term support and appears poised for further declines. DXY is currently weak at 97.8. That could trigger a big rally in the coming weeks, especially for cryptocurrencies. $ETH.
X chart image. Source: @TATrader_Alan On X
AI breakdown: how much $ETHCan the movement of be explained using DXY?
In its AI-backed explanation, Perplexity pointed out that: $ETH And DXY can account for around 40% to 60% of Ethereum’s volatility, especially during periods of monetary policy changes. This number is always more significant during rate hikes and news events, but with a lag of days to months depending on the catalyst.
The historical tables referenced in the analysis are based on specific DXY highs and $ETH Turning point. For example, during the dollar surge in March 2020, Ethereum bottomed out before mounting a multi-month rally as DXY continued to fall to $89.
Another coincidence was observed in 2022, when the dollar reached multi-year highs amid a broader contraction in risk assets. This caused Ethereum to create a bear market low. If the current DXY collapse is prolonged, it is possible that flows into Ethereum will start to increase again.
The green forecast arc on the chart suggests that a sustained decline in the dollar could open the door to a new expansionary phase for the economy. $ETHexpands when the price exceeds $10,000. For Ethereum to rise above $3,000 again, the following needs to happen: This is a confirmation of sustainability. weak dollar Improve on-chain and derivatives metrics.
Featured image created by Dall.E, chart on Tradingview.com
