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2023/04/28 08:55

Bitcoin's Negative Correlation With Dollar Index S

Bitcoin's Negative Correlation With Dollar Index Strengthens Ahead of U.S. GDP Data

The 90-day correlation coefficient between bitcoin and the dollar index has slipped to -0.70 from -0.11 four weeks ago.

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Bitcoin (BTC) has historically moved in the opposite direction of the U.S. Dollar Index (DXY), which gauges the greenback's exchange rate against major fiat currencies, including the euro.

The negative correlation has strengthened, reversing the brief let-up witnessed in late March, and indicating the possibility of accelerated gains in the cryptocurrency in the case of a continued dollar slide following the release of the U.S. gross domestic product data on Thursday.

The 90-day correlation coefficient between bitcoin and the dollar index has slipped to a two-month low of -0.70, according to data from charting platform TradingView. It had weakened to -0.11 four weeks ago.

Correlations are measured on a scale of -1 to +1. Values skewed toward -1 indicate that lower prices for one variable are associated with higher prices for the other.IUM3VYQPURDYROZCNXTNBOEDEE.png
Bitcoin and the DXY have been mostly negatively correlated over the past three years, except in times where crypto-specific factors overshadowed the dollar trends. For instance, bitcoin fell in late 2022 as the collapse of crypto exchange FTX kept investors from cheering weakness in the U.S. currency. A similar breakdown was seen in the lead-up to Coinbase's (COIN) Nasdaq debut in April 2021 and the launch of a futures-based exchange-traded fund in the U.S. the following October.
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