Macro Negative Correlation with Bitcoin

6 ก.ค. 2023

The US Dollar Index DXY is negatively correlated with the macro Bitcoin BLX chart.

Indicators like the Correlation Coefficient indicator will display swings from negative to positive correlation between DXY and INDEX:BTCUSD. This can lead to a belief that they are not in fact negatively correlated.

But, when you zoom out to a macro view of Bitcoin and compare, the dollar index's peaks correspond with Bitcoin's lows, while Bitcoin's peaks correspond with DXY's lows.

At times, these corresponding peaks and valleys have occurred near the same dates and times, while at other times DXY has acted as a leading indicator for future movement for Bitcoin.

Where will we go next?

• if DXY returns to its previous high and breaks it, I suspect Bitcoin will move lower
  
• on the other hand, should DXY move further down or get stuck within a range, it's likely that Bitcoin will move higher
  

What do you think?

7 ก.ค. 2023

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A related post regarding DXY movements affecting Bitcoin and other markets here:

2 ต.ค. 2023

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DXY has made a strong move up for 12 straight weeks after bouncing off monthly support (middle of the W pattern above), as shown below. Bitcoin likely will follow, in the opposite direction and with a strong move down:

19 เม.ย.

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It has been quite some time since updating this post, and bitcoin has run as DXY has ranged.

DXY is at a point where it may flip strong bullish again, should it remain above 106, and if so, Bitcoin's run may end soon - whether BTC moves down while DXY moves up, or positively correlates with DXY briefly instead - in that case even more concerning that Bitcoin's run may end more abruptly and stronger.

Another possible scenario is that DXY fails to remain above 106 and goes back into it's range, allowing markets to run for longer.

19 เม.ย.

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