bitcoin and the dollar index (DXY) are moving in opposite directions, and the latter is on the verge of a major move that may embolden crypto bears.
The largest cryptocurrency is under pressure for the third day in a row, trading near $63,900 and down almost 1% since midnight UTC. The overall market is mostly showing similar losses, with the exception of a few tokens like HASH, XLM, and ENA, which gained 7% or more.
The dollar index, which tracks the value of the US currency against major fiat currencies, has gained 0.26% to 100.66, extending Wednesday’s 0.8% gain. What’s notable is that the index is now poised to firmly break out of a 13-month trading range.
This type of setup usually leads to more momentum seeking by traders, resulting in higher profits. The strength of the dollar typically weighs on dollar-denominated assets like bitcoin.
Historically, BTC has tended to move in the opposite direction to the dollar. Its 90-day correlation coefficient with the DXY was recently -0.82.
