DXY and S&P 500 Indices Indicate Potential Bitcoin (BTC) Growth
Date: 2023-10-08 Author: Dima Zakharov Categories: BUSINESS
The Correlation Between DXY and Stock Markets
The US Dollar Index (DXY) and the S&P 500 Index (SPX) are two key indicators that play a significant role in global financial markets. Recent analyses reveal an intriguing correlation between these two indicators and how they might impact the future of Bitcoin (BTC).
The DXY Index measures the value of the US dollar against a basket of other major world currencies. It is important to note that the currency market and the cryptocurrency market often exhibit an inverse correlation. This means that when DXY rises, prices of Bitcoin and other cryptocurrencies may decrease, and vice versa. Thus, a high DXY index can exert pressure on the cryptocurrency market.
However, as noted in the article, the DXY index has started to show a slowdown in its growth rate after a prolonged uptrend. This could indicate a potential correction in the future. Despite DXY still remaining at relatively high levels, signals of bearish divergence and the formation of a "Gravestone Doji" suggest an impending decrease.
Potential Consequences for the Cryptocurrency Market
Now, let's examine the potential consequences for the cryptocurrency market, especially for Bitcoin (BTC), if the DXY index indeed begins a correction. As previously mentioned, the inverse correlation between DXY and cryptocurrency prices implies that a decline in DXY could contribute to an increase in cryptocurrency prices.
It is interesting to note that the article also mentions a long-term correlation between the S&P 500 and Bitcoin, which remains negative. This could corroborate the possibility of rising Bitcoin prices. The signal for the beginning of a bull market emerged in February 2023 and is still relevant.
Prospects for the Stock Market
It's also worth paying attention to the S&P 500 Index (SPX), which represents a basket of the 500 largest US companies. According to the analysis, this index can also influence the future of Bitcoin. Interestingly, the S&P 500 has begun approaching a level of support/resistance at $4200, and the daily RSI is testing a long-term support line.
If the DXY index indeed initiates a correction, it could create favorable conditions for the S&P 500 and other stocks. This, in turn, might encourage investors to increase their interest in risky assets, including cryptocurrencies.
