{"id":279044,"date":"2021-06-19T22:00:00","date_gmt":"2021-06-19T19:00:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/data-suggests-the-strong-us-dollar-makes-bitcoin-weaker-argument-is-flawed\/"},"modified":"2021-06-19T22:00:00","modified_gmt":"2021-06-19T19:00:00","slug":"data-suggests-the-strong-us-dollar-makes-bitcoin-weaker-argument-is-flawed","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/data-suggests-the-strong-us-dollar-makes-bitcoin-weaker-argument-is-flawed\/","title":{"rendered":"# Data suggests the strong US dollar makes Bitcoin weaker argument is flawed"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a2f0f8586892\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a2f0f8586892\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/data-suggests-the-strong-us-dollar-makes-bitcoin-weaker-argument-is-flawed\/#The_dollar_strengthened_after_the_Fed_speech\" >The dollar strengthened after the Fed speech<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/data-suggests-the-strong-us-dollar-makes-bitcoin-weaker-argument-is-flawed\/#Correlation_is_a_longer-term_indicator_not_an_intraday_metric\" >Correlation is a longer-term indicator, not an intraday metric<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># Data suggests the strong US dollar makes Bitcoin weaker argument is flawed <\/strong>&#8221;<\/p>\n<div class=\"post-content\" data-v-128018ef>At the moment, there seems to be a <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a> assumption that when the U.S. dollar value increases against other global major currencies, as measured by the DXY index, the impact on Bitcoin (BTC) is negative.<\/p>\n<p>For the past few weeks, analysts and influencers have been issuing alerts about this inverse correlation, which held true until March 2021.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">So I guess we&#8217;re not all obsessed with <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/search?q=%24DXY&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$DXY<\/a> anymore? Because it&#8217;s looking super bullish &amp; had provided an almost perfect inverse correlation for over a year. Either way we&#8217;re about to find out if <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/search?q=%24BTC&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$BTC<\/a> has matured to the point of being uncorrelated. \ufe0f <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/hashtag\/Banks?src=hash&amp;ref_src=twsrc%5Etfw\">#Banks<\/a> <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/hashtag\/Brrrr?src=hash&amp;ref_src=twsrc%5Etfw\">#Brrrr<\/a> <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/hashtag\/Bitcoin?src=hash&amp;ref_src=twsrc%5Etfw\">#Bitcoin<\/a> <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/t.co\/gequzmr6p2\">pic.twitter.com\/gequzmr6p2<\/a><\/p>\n<p>\u2014 Alex Saunders \u200d (@AlexSaundersAU) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/AlexSaundersAU\/status\/1356517677053865985?ref_src=twsrc%5Etfw\">February 2, 2021<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">What could be the trigger of <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/hashtag\/Bitcoin?src=hash&amp;ref_src=twsrc%5Etfw\">#Bitcoin<\/a> top? A <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/hashtag\/DXY?src=hash&amp;ref_src=twsrc%5Etfw\">#DXY<\/a> bottom! And we may just have that around the corner! <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/t.co\/1Cy03QuMgb\">https:\/\/t.co\/1Cy03QuMgb<\/a> <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/t.co\/zKUh9CWc72\">pic.twitter.com\/zKUh9CWc72<\/a><\/p>\n<p>\u2014 Henrik Zeberg (@HenrikZeberg) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/HenrikZeberg\/status\/1345426667209191424?ref_src=twsrc%5Etfw\">January 2, 2021<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>However, no matter if you track a 20-day or 60-day correlation, the situation reversed over the past three months.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-06\/a6e3f410-eea5-4ca5-9a2a-01829b9187eb.png\"><figcaption style=\"text-align: center;\"><em>Dollar Index DXY (blue) vs. Bitcoin (orange, logarithmic). Source: TradingView<\/em><\/figcaption><\/figure>\n<p>The correlation indicator (red) has been ranging above 50% since mid-March, indicating that both DXY and Bitcoin have generally followed a similar trend.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_dollar_strengthened_after_the_Fed_speech\"><\/span>The dollar strengthened after the Fed speech<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>As Cointelegraph reported, May&#8217;s Consumer Price Index (CPI) report showed inflation hitting a 13-year high, and Federal Reserve Chair Jerome Powell acknowledged that inflation could run higher than planned in the short term. Still, he clarified that &#8220;longer-term inflation expectations are anchored at a place that is consistent with our goal.&#8221;<\/p>\n<p>The market gave the Fed a &#8216;vote of confidence,&#8217; causing the U.S. dollar to <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>reciate versus major global currencies. Meanwhile, Bitcoin dropped 8% to a $35,300 low on June 18, further reinforcing the inverse correlation thesis.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>Forget Elon, here&#8217;s why Bitcoin traders should be watching the U.S. Dollar Index instead<\/em><\/strong><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Correlation_is_a_longer-term_indicator_not_an_intraday_metric\"><\/span>Correlation is a longer-term indicator, not an intraday metric<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Even though pundits and influencers love to dissect those events and extrapolate 1-day movements, one should analyze a more extended timeframe to understand the potential impacts of the DXY index on the Bitcoin price.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-06\/b6efcc4e-50ca-45c8-a5a4-19aa23a6d08b.png\"><figcaption style=\"text-align: center;\"><em>Dollar Index DXY (blue) vs. Bitcoin (orange, logarithmic). Source: TradingView<\/em><\/figcaption><\/figure>\n<p>Notice how both markers weakened during May, after a relatively flat period in late April. It seems premature, at least, to call the recent decoupling an inverse correlation. Multiple forces could be behind Bitcoin&#8217;s failure to sustain a $40,000 support on June 16 and the subsequent price correction.<\/p>\n<p>For starters, Liu He, Vice Premier of China and a member of the all-powerful eight-person politburo, led a meeting on preventing and controlling financial risks on May 24. Among the decisions was a crackdown on Bitcoin mining and trading activities.<\/p>\n<p>Bitcoin&#8217;s hash rate dropped to the lowest level since November 2020 as miners are starting to move away from China. Huobi temporarily suspended futures trading to Chinese users, while Futures platform Bybit revealed it would have closed accounts registered with Chinese phone numbers.<\/p>\n<p>Furthermore, on May 26, the United States Securities and Exchange Commission Chair Gary Gensler said the regulators are looking forward to working with fellow regulators and Congress to fill gaps in investor protection in crypto markets.<\/p>\n<p>Therefore, the potential U.S. regulation and the current China crackdown on mining and trading activities seem vital to Bitcoin&#8217;s recent underperformance. Once those issues are no longer threats, the gap that has been created from DXY&#8217;s positive move could fade away.<\/p>\n<p><em>The views and opinions expressed here are solely those of the <\/em><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/noshitcoins\"><em>author<\/em><\/a><em> and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.<\/em><\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/data-suggests-the-strong-us-dollar-makes-bitcoin-weaker-argument-is-flawed\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Data suggests the strong US dollar makes Bitcoin weaker argument is flawed &#8221; At the moment, there seems to be a general assumption that when the U.S. dollar value increases against other global major currencies, as measured by the DXY index, the impact on Bitcoin (BTC) is negative. For the past few weeks, analysts&#8230;<\/p>\n","protected":false},"author":1,"featured_media":279045,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDYvZTA1ZThhNWUtYTYyYS00NmViLThhNGUtYTY4ZmJjM2FlYjg1LmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74862,74937,74858,74863,76153,74939,4973,73785],"class_list":["post-279044","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bitcoin","tag-bitcoin-price","tag-bitcoin-regulation","tag-cryptocurrencies","tag-dollar","tag-market-analysis","tag-china","tag-markets"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/279044","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=279044"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/279044\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/279045"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=279044"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=279044"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=279044"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}