The U.S. Dollar Index (DXY) and the stock prices of the largest U.S. companies (SPX) have a negative correlation that may provide insights for the cryptocurrency sector, including Bitcoin (BTC). If the dollar’s uptrend ends, both stock markets and cryptocurrencies could see a recovery. Bitcoin’s long-term performance against the S&P 500 confirms the start of a bull market in February 2023. The recent correction in Q3 for traditional markets and cryptocurrencies may be coming to an end, especially if the U.S. dollar cools down. The upcoming correction on the DXY aligns with a potential bounce on the S&P 500 chart, which could lead to an uptrend continuation. However, Bitcoin has lagged behind the S&P 500 in recent months, but it may increase its volatility and potentially outperform traditional markets in Q4 2023. Historical data shows that Bitcoin’s performance against the S&P 500 is a good indicator of cryptocurrency bull and bear markets. The confirmation of a bull market was signaled by the upward crossing of the monthly RSI indicator for the BTC/SPX pair in February 2023, and despite a minor correction, the bull market remains intact. If these signals are confirmed, the cryptocurrency market and Bitcoin could enter a mature bull market phase soon.
Hot Take: Potential Recovery for Cryptocurrencies as Dollar Weakens
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