{"id":470173,"date":"2022-07-03T18:14:40","date_gmt":"2022-07-03T15:14:40","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/bitcoins-inverse-correlation-with-us-dollar-hits-17-month-highs-whats-next-for-btc\/"},"modified":"2022-07-03T18:14:40","modified_gmt":"2022-07-03T15:14:40","slug":"bitcoins-inverse-correlation-with-us-dollar-hits-17-month-highs-whats-next-for-btc","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/bitcoins-inverse-correlation-with-us-dollar-hits-17-month-highs-whats-next-for-btc\/","title":{"rendered":"# Bitcoin&#8217;s inverse correlation with US dollar hits 17-month highs \u2014 what&#8217;s next for BTC?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 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-6a3aa8c3a6651\" 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-6a3aa8c3a6651\" 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-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/bitcoins-inverse-correlation-with-us-dollar-hits-17-month-highs-whats-next-for-btc\/#%E2%80%9D_Bitcoins_inverse_correlation_with_US_dollar_hits_17-month_highs_%E2%80%94_whats_next_for_BTC_%E2%80%9C\" >&#8221; Bitcoin&#8217;s inverse correlation with US dollar hits 17-month highs \u2014 what&#8217;s next for BTC? &#8220;<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/bitcoins-inverse-correlation-with-us-dollar-hits-17-month-highs-whats-next-for-btc\/#Bitcoin_and_the_dollar_go_in_opposite_ways\" >Bitcoin and the dollar go in opposite ways<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/bitcoins-inverse-correlation-with-us-dollar-hits-17-month-highs-whats-next-for-btc\/#Will_dollar_rise_further\" >Will dollar rise further?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/bitcoins-inverse-correlation-with-us-dollar-hits-17-month-highs-whats-next-for-btc\/#Bitcoin_to_bottom_out_in_2022\" >Bitcoin to bottom out in 2022?<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Bitcoins_inverse_correlation_with_US_dollar_hits_17-month_highs_%E2%80%94_whats_next_for_BTC_%E2%80%9C\"><\/span>&#8221; Bitcoin&#8217;s inverse correlation with US dollar hits 17-month highs \u2014 what&#8217;s next for BTC? &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div class=\"post-content\" data-v-2a0745c6>Bitcoin (BTC) has been moving in the opposite direction of the U.S. dollar since the beginning of 2022 \u2014 and now that inverse relationship is more extreme than ever.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Bitcoin_and_the_dollar_go_in_opposite_ways\"><\/span>Bitcoin and the dollar go in opposite ways<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Notably, the weekly correlation coefficient between BTC and the dollar dropped to 0.77 below zero in the week ending July 3, its lowest in seventeen months. <\/p>\n<p>Meanwhile, Bitcoin&#8217;s correlation with the tech-heavy Nasdaq Composite reached 0.78 above zero in the same weekly session, data from TradingView shows.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-07\/3b1f2cca-b349-4b8d-bb23-679c5abc08a8.png\"><figcaption style=\"text-align: center;\"><em>BTC\/USD and U.S. dollar correlation coefficient. Source: TradingView<\/em><\/figcaption><\/figure>\n<p>That is primarily because of these markets&#8217; year-to-date performances amid the fears of recession, led by the Federal Reserve&#8217;s benchmark rate hikes to curb rising inflation. Bitcoin, for example, has lost over 60% in 2022, while Nasdaq&#8217;s returns in the same period stand around minus 29.72%.<\/p>\n<p>On the other hand, the dollar has excelled, with its U.S. dollar index (DXY), a metric that measures its strength against a basket of top foreign currencies, hovering around its January 2003 highs of 105.78.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-07\/9f172b21-a800-42d7-84ab-78b50e23fca5.png\" alt=\"\" title=\"\"><figcaption style=\"text-align: center;\"><em>BTC\/USD vs. DXY vs. NDAQ weekly price chart. Source: TradingView<\/em><\/figcaption><\/figure>\n<h2><span class=\"ez-toc-section\" id=\"Will_dollar_rise_further\"><\/span>Will dollar rise further?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The Fed <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>ears compelled to increase benchmark rates based on how traders have priced the front-end derivative contracts. <\/p>\n<p>Notably, traders anticipate the Fed to raise the rates by 75 basis points (bps) in July.\u00a0They also bet Fed won&#8217;t raise rates beyond 3.3% by this year&#8217;s end from the current\u00a01.25%-1.5% range.<\/p>\n<p>However, a push to 3.4% by the first quarter of 2023 could have the central bank dial back its aggressive tightening. <\/p>\n<p>That could result in a 50 basis point cut by the end of next year, as shown in the chart below.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-07\/9570894a-ccba-4689-862f-492b819cf0d7.png\"><figcaption style=\"text-align: center;\"><em>Changes in Fed&#8217;s interest rate target. Source: TradingView<\/em><\/figcaption><\/figure>\n<p>An early rate cut could happen if the inflation data cools down, thus limiting investors&#8217; appetite for the dollar, according to Wall Street analysts <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.wsj.com\/articles\/it-was-a-lousy-second-quarterexcept-for-the-u-s-dollar-11656667800\">surveyed<\/a> by JPMorgan. Notably, around 40% see the dollar ending 2022 at its current price levels \u2014 around 105.<\/p>\n<p>Meanwhile, another 36% bet that the greenback would correct ahead of the year&#8217;s close.<\/p>\n<p>&#8220;Foreign exchange is not a linear world. At some point, things flip,&#8221; noted Ugo Lancioni, head of global currency at Neuberger Berman, adding: <\/p>\n<blockquote><p>&#8220;I personally have a bias to short the dollar at some point.&#8221;<\/p><\/blockquote>\n<h2><span class=\"ez-toc-section\" id=\"Bitcoin_to_bottom_out_in_2022\"><\/span>Bitcoin to bottom out in 2022?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>In addition, the dollar&#8217;s ability to continue its rally for the rest of 2022 could be hampered by a classic technical pattern.<\/p>\n<p>First <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/notAgres\/status\/1542542687341281280\">spotted<\/a> by independent market analyst Agres, the DXY&#8217;s &#8220;double top&#8221; pattern is partially confirmed due to its two consecutive highs and a common support level of 103.81. <\/p>\n<p>As a rule of technical analysis, the double top pattern could resolve when the price breaks below the support and falls by as much as the structure&#8217;s maximum height, as shown in the chart below.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-07\/b7df4059-4ccd-479f-8073-22f713c32110.png\"><figcaption style=\"text-align: center;\"><em>DXY daily price chart. Source: TradingView<\/em><\/figcaption><\/figure>\n<p>As a result, DXY&#8217;s double top profit target\u00a0comes to be near 101.8, down over 3.25% from today&#8217;s price.<\/p>\n<p>&#8220;The dollar is extremely overbought and overheated,&#8221; explained Agres, adding that its correction in the coming sessions could benefit stocks and cryptocurrencies.<\/p>\n<blockquote><p>&#8220;Finally, looking like it [DXY] will topple down hard. In perfect confluence for a melt-up scenario.\u00a0When [the] dollar goes down, stocks and crypto rally.&#8221;<\/p><\/blockquote>\n<p><strong><em>Related:\u00a0Bitcoin trader says expect more chop, downside, then sideways price action for BTC this summer<\/em><\/strong><\/p>\n<p>Meanwhile, Bitcoin&#8217;s &#8220;MVRV-Z Score&#8221; has also fallen into a range that has historically preceded sharp, long-term upside retracement. This on-chain indicator predicts that Bitcoin could bottom around $15,600 in 2022.<\/p>\n<p class=\"post-content__disclaimer\">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 move involves risk, you should conduct your own research when making a decision.\n<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/p>\n<\/div>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\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\/bitcoin-s-inverse-correlation-with-us-dollar-hits-17-month-highs-what-s-next-for-btc\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Bitcoin&#8217;s inverse correlation with US dollar hits 17-month highs \u2014 what&#8217;s next for BTC? &#8220; Bitcoin (BTC) has been moving in the opposite direction of the U.S. dollar since the beginning of 2022 \u2014 and now that inverse relationship is more extreme than ever. Bitcoin and the dollar go in opposite ways Notably, the&#8230;<\/p>\n","protected":false},"author":1,"featured_media":470174,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDcvYTM4MWEwYmItZjI5Yi00N2I2LWEyY2UtNjBiOWRiNWRjODJlLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74862,81951,74937,76153,74939,78261,70551,70552,73785],"class_list":["post-470173","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bitcoin","tag-bitcoin-analysis","tag-bitcoin-price","tag-dollar","tag-market-analysis","tag-tech-analysis","tag-inflation","tag-interest-rates","tag-markets"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/470173","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=470173"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/470173\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/470174"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=470173"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=470173"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=470173"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}