Bitcoin (BTC) looks to repossess $45,000 on October. 1 as the United States dollar retreated lower after striking its one-twelvemonth high. Bitcoin'south tight inverse correlation with the greenback over the past month suggests that a weakening dollar could button BTC's price fifty-fifty higher in the coming sessions.

Bitcoin-dollar correlation on hourly chart. Source: TradingView

Dollar drops following labor market place shock

In particular, the U.Due south. Dollar Index (DXY), which measures the dollar'due south forcefulness against a handbasket of half-dozen foreign currencies, including the euro and sterling, hitting 94.fifty Thursday for the first time since Sept. 28, 2022. But it retreated on news of rising U.S. jobless claims against the forecasts of a reject.

The labor data released Thursday showed that the number of jobless claims rose to 362,000 concluding week against 351,000 a calendar week earlier and against the economists' projection of 333,000. Equally a result, the number of reapplications got stuck effectually 2.8 million for five weeks in a row.

For the markets, this could be news that the Federal Reserve might delay tapering its $120-billion asset-purchasing program from November to a afterwards month, thus keeping interest rates lower and the dollar's renewed strength temporary.

DXY daily price nautical chart. Source: TradingView

The index was trading at 94.263 at the fourth dimension of writing.

Technical outlook projects Bitcoin higher, dollar lower

Technicals also showed the greenback facing the prospect of a correction ahead. For example, independent market analyst TradingShot spotted the dollar index inside a megaphone pattern, which is nearly to get topped out to pursue a correction in the coming sessions, equally shown in the nautical chart below.

U.S. dollar index daily cost chart featuring megaphone technical setup. Source: TradingShot, TradingView

"Based on the 1D relative strength index (RSI), it appears that DXY is right at the top of the formation every bit [information technology was] on Aug 15, 2022," TradingShot wrote.

"DXY is edifice upwards a strong pull-back to the bottom of the Megaphone."

Meanwhile, a recent tour of selling in the Bitcoin market lately had it pigment a falling wedge pattern. In detail, falling wedges appear when the price trends lower inside a channel comprising 2 diverging, descending trendlines.

Traditional analysts see the falling wedge pattern every bit a bullish reversal indicator, noting that a pause in a higher place its upper trendline moves the price higher by as much as the maximum distance between the wedge'due south trendlines.

BTC/USD daily price nautical chart featuring falling wedge setup. Source: TradingView

The structure'south maximum top is roughly $10,000. As a result, Bitcoin's cost can at least retest $50,000 should the wedge breakout play out as intended.

A weaker dollar ways stronger Bitcoin

On the other hand, the underwhelming jobs written report could boost investors' interim appetite for Bitcoin.

Related: Bitcoin's abrupt fall from $50K linked to stronger US dollar, gold — Correlation shows

Vasja Zupan, president of Matrix Exchange, told Cointelegraph that the dollar'south weakness and devaluation against rising aggrandizement would continue to brand investors put their excess cash in crypto markets. He said:

"Bitcoin in its core proposition has an integrated hedge against inflation and, therefore, persistently college inflation in the U.S. tin only push information technology upwards. Therefore, in the long term, the dollar'south worth volition continue to be lesser than Bitcoin."

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading movement involves hazard, you should conduct your own research when making a decision.