The US dollar’s strength weighs on major cryptocurrencies. A double top pattern at the $100 suggests more weakness ahead.
The US dollar’s strength weighs on major cryptocurrencies
A double top pattern at the $100 suggests more weakness ahead
If the dollar’s strength persists, one should not exclude a move to the 2022 support area
The US dollar is trending higher lately, despite uncertainty surrounding the debt ceiling negotiations. The US Treasury warned that unless the debt limit is raised or suspended, it will have no more funds to pay its bills starting in June.
Ongoing negotiations between Republicans and Democrats keep the suspense, but even a short debt ceiling breach would have substantial negative consequences for the US economy. As for the US dollar, the opinions are split as to how such an event would impact the world’s reserve currency.
Regardless of the reason, the dollar is trending higher against both fiat and cryptocurrencies. For instance, the EUR/USD pair trades below 1.08 after trading around 1.11 one month ago.
LTC/USD is one of the cryptocurrency pairs where the recent dollar strength is visible. Sure enough, the pair is up over 24% UTD, but today alone, it gave up more than 5% of its gains when this article was written.
Moreover, the worse part is that it failed at horizontal resistance given by the $100 level. It means that a triangle as a reversal pattern might be in place, suggesting more weakness for the pair in the period ahead.
LTC/USD chart by TradingView
A double top pattern suggests more weakness ahead
One of the most powerful reversal patterns is a double top. It is even more powerful in this case because it formed at a round number – the $100 level.
A move below the rising trendline opens the gates to further declines toward the 2022 support area seen at $40. If the dollar strength remains, one should not be surprised for the support to give way sooner rather than later.