Bitcoin and the Dollar Index (DXY) are moving in opposite directions, with the latter on the verge of a major move that may embolden crypto bears.
The largest cryptocurrency is under pressure for a third straight day, trading near $63,900 and down nearly 1% since midnight UTC. The broader market is mostly showing similar losses, with the exception of a few tokens such as HASH, XLM and ENA, which gained 7% or more.
The Dollar Index, which tracks the U.S. currency’s value against major fiat currencies, has gained 0.26% to 100.66, extending Wednesday’s 0.8% rise. What’s notable is that the index is now on the verge of firmly breaking out of a 13-month-long trading range.
This type of setup usually leads to more momentum chasing by traders, resulting in further gains. Strength in the greenback 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 the DXY was recently minus 0.82.