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Macro Negative Correlation with Bitcoin

dudebruhwhoa Updated   
TVC:DXY   U.S. Dollar Index
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?
Comment:
A related post regarding DXY movements affecting Bitcoin and other markets here:

Trade active:
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:


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