Bitcoin and the Dollar Index (DXY) are moving in opposite directions, with the latter poised for a major move that could 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 market as a whole 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 value of the U.S. currency against major fiat currencies, gained 0.26% to 100.66, extending its 0.8% rise from Wednesday. What is notable is that the index is now on the verge of breaking out of a 13-month trading range for good.
This type of setup usually leads traders to seek more momentum, leading to further gains. The greenback’s strength generally 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.
