Bitcoin and the dollar index (DXY) are moving in opposite directions, with the latter on the verge of a big move that could encourage crypto bears.
The major cryptocurrency is under pressure for a third day in a row, trading near $63,900 and falling nearly 1% since midnight UTC. The broader market mostly shows similar losses, with the exception of a few tokens such as HASH, XLM and ENA, which rose 7% or more.
The dollar index, which tracks the U.S. currency’s value against major fiat currencies, rose 0.26% to 100.66, extending Wednesday’s 0.8% gain. Notably, the index is now on the verge of breaking solidly out of a 13-month trading range.
This type of setup usually leads to more momentum chasing by traders, resulting in additional gains. The strength of the dollar typically weighs on dollar-denominated assets such as bitcoin.
BTC has historically tended to move in the opposite direction to the dollar. Its 90-day correlation coefficient with DXY was recently minus 0.82.
