Analyst: The bearish trend of the dollar index may be a "short positions trap"

BlockBeats news, on July 2, Coindesk analyst Omkar Godbole stated that Bitcoin long positions are awaiting a continued weakening of the dollar to inject upward momentum into the crypto assets market, but technical charts show that one should be wary of reversal signals from historical patterns—the dollar index weekly is about to form a “death cross”, a traditional bearish pattern that has repeatedly marked the dollar’s phase bottoms since 2009. Omkar Godbole noted that although this frightening pattern is usually seen as a long-term bearish signal, historical data shows that it often acts as a “short positions trap”—since 2009, this pattern has appeared four times, marking the dollar’s bottom and trend reversal (as shown by the vertical lines in the chart). The most recent occurrence was in January 2021, when the dollar index bottomed around 90 and continued to rise, eventually reaching a peak above 114 in September 2022. It should be noted that price patterns do not always develop as expected, and the upcoming death cross may not necessarily trap short positions again. However, understanding this historical pattern can help traders manage their positions more effectively.