Data offers the strong US dollar causes Bitcoin weaker argument is flawed

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Analysts and traders are linking Bitcoin’s bearish turn with the increasing strength of the U.S. dollar. But data shows something else. Right now , there appears to be a general presumption that when the U.S. dollar value goes up against other global major currencies. As measured by the DXY index, the impact on Bitcoin (BTC) is negative.
For the past few weeks, analysts and influencers are talking about issuing alerts about this inverse correlation, which came true until March 2021. Even though, no matter if you track a 20-day or 60-day correlation, the status reversed over the past three months.
May’s Consumer Price Index (CPI) report recorded inflation hitting a 13-year high. And also, Federal Reserve Chair Jerome Powell authenticated that inflation can run upper than planned in the short term. However, he made it clear that “longer-term inflation expectations are anchored at a place that is consistent with our goal.”
The market gave the Fed a ‘vote of confidence,’. They caused the U.S. dollar to valued against major global currencies. At the same time, Bitcoin dropped 8% to a $35,300 low on June 18, further reinforcing the inverse correlation thesis.

longer-term indicator, Correlation

Even though specialists and influencers like to analyze those events and extrapolate 1-day movements. In another word, we need to analyze a more extended timeframe to figure out the potential impacts of the DXY index on the Bitcoin price.
In addition to this, be aware how both markers weakened during May, after a relatively flat period in late April. It looks too early, at least, to call the recent separation an inverse correlation.
several forces maybe behind Bitcoin’s lack of success to sustain a $40,000 support on June 16 and the subsequent price correction.
For beginners, Liu He, Vice Premier of China and a member of the all-powerful eight-person politburo, conduced a meeting on stopping and controlling financial risks on May 24. So, between the decisions there was a crackdown on Bitcoin mining and trading activities.

Suspension Chinese users

Bitcoin’s hash rate fell to the lowest level since November 2020 as miners are starting to move away from China. Huobi , ded futures trading to  for a limited period of time. While Futures platform Bybit disclosed it would have closed accounts registered with Chinese phone numbers.
Moreover, on May 26, the United States Securities and Exchange Commission Chair Gary Gensler said that the regulators are eager to work with regulators and Congress to fill gaps in investor protection in crypto markets.
So, the possible U.S. regulation and the current China crackdown on mining and trading activities look essential to Bitcoin’s recent underperformance. When, those problems are no longer threats, the gap that is from DXY’s positive move can disappear.

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