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Over the past few weeks, the Bitcoin price has maintained a somewhat healthy momentum, forging minor swing highs and lows in its bull run revival. Interestingly, this early-week upward movement has been corrected following the escalating conflict between Israel and Iran.
All in all, the overall positive outlook for the premier cryptocurrency has remained, even though it has been observed to be against historical perspective. An on-chain analyst on social media platform X has delved into this strange phenomenon in the BTC market and the possible reasons behind it.
Bitcoin’s Historical Correlations With Macro Instruments
In a recent post on the X platform, an on-chain analyst with the pseudonym Darkfost broke down what, until recently, used to be conventional expectations in the Bitcoin market relative to broader macroeconomics. The crypto pundit mentioned that investors consider key indicators when trying to decipher what institutional sentiments and the broader state of global liquidity may be like.
The key indicators investors highlighted in this analysis include the US Dollar Index (DXY), which measures the value of the US dollar against a basket of major foreign currencies, and the US Treasury Yields, which basically represent the return investors earn on United States government bonds.
According to Darkfost, the above chart illustrates a well-known macro principle: when both the DXY and bond yields are on the rise, capital tends to flee risk assets (one of which is Bitcoin). As a result, the premier cryptocurrency becomes susceptible to corrective movements.
According to the on-chain analyst, this principle is backed by historical trends, as bear markets in crypto have coincided with strong uptrends in both yields and the DXY.
On the other hand, when there is a loss of momentum in DXY and yields, investor appetite tends to shift towards risk. The reason for this, Darkfost explained, could be expectations of Federal Reserve rate cuts, which fuel bullish sentiment across crypto markets.
BTC Breaks Conventional Macro Logic
In the post on X, Darkfost then went on to point out that the current BTC cycle has been unusual. The online pundit reported that there has been a decoupling between the Bitcoin price and bond yields, which manifests as a seeming annulment of the usual macro principles.
The analyst noted that the Bitcoin price continues to maintain its upward movement, despite yields reaching some of their highest levels in Bitcoin’s history. But this holds, he was sure to note, when the DXY declines.
What this anomaly suggests, Darkfost inferred, is that Bitcoin has taken on a new role within the macro landscape, one that increases its perception as a store of value. To take it further, this means that BTC, as of now, may react a little less conventionally to the macro forces believed to influence the crypto market.
As of this writing, the Bitcoin price sits just beneath $106,000, reflecting an almost 2% jump in the past 24 hours.
Featured image from iStock, chart from TradingView
Opeyemi is a proficient writer and enthusiast in the exciting and unique cryptocurrency realm. While the digital asset industry was not his first choice, he has remained absolutely drawn since making a foray into the space over two years. Now, Opeyemi takes pride in creating unique pieces unraveling the complexities of blockchain technology and sharing insights on the latest trends in the world of cryptocurrencies.
Opeyemi savors his attraction to the crypto market, which explains why he spends the better parts of his day looking through different price charts. “Looking” is a rather simple way to describe analyzing and interpreting various price patterns and chart formations. However, it appears that is not Opeyemi’s favorite part – in fact, far from it.
Being able to connect what happens on a price chart to on-chain movements and blockchain activities is what keeps Opeyemi ticking. “This emphasizes the intricacies of blockchain technology and the cryptocurrency market,” he would say. Most importantly, Opeyemi thinks of any market insights as the gospel, while recognizing that he is only a messenger.
When he is not clicking away at his keyboard, Opeyemi is most definitely listening to music, playing games, reading a book, or scrolling through X. He likes to think he is not loyal to a particular genre of music, which can be true on many days. However, the fast-rising Afrobeats genre is a staple in Opeyemi’s Spotify Daily Mix.
Meanwhile, Opeyemi is a voracious reader who enjoys a wide category of books – ranging from science fiction, fantasy, and historical, to even romance. He believes that authors like George R. R. Martin and J. K.
Rowling are the greatest of all time when it comes to putting pen to paper. Opeyemi believes his reading of the Harry Potter series twice is proof of that.
Indeed, Opeyemi enjoys spending most of his time within the four walls of his home. However, he also sometimes finds solace in the company of his friends at a bar, a restaurant, or even on a stroll. In essence, Opeyemi’s ambivert (haha! been searching for an opportunity to use the word to describe myself) nature makes him a social chameleon who is able to quickly adapt to different settings.
Opeyemi recognizes the need to constantly develop oneself in order to stay afloat in a competitive and ever-evolving market like crypto. For this reason, he is always in learning mode, ready to pick up the slightest lesson from every situation. Opeyemi is efficient and likes to deliver all that is required of him in time – he believes that “whatever is worth doing at all is worth doing well.” Hence, you will always find him striving to be better.
Ultimately, Opeyemi is a good writer and an even better person who is trying to shed light on an exciting world phenomenon – cryptocurrency. He goes to bed every day with a smile of satisfaction on his face, knowing that he has done his bit of the holy assignment – spreading the crypto gospel to the rest of the world.
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