Forget Inflation: Bitcoin Rallies When The Dollar Falls, Study Finds

According to NYDIG research, Bitcoin’s price moves are driven more by the strength of the US dollar and broad liquidity conditions than by direct ties to ￰0￱ Cipolaro, NYDIG’s global head of research, said the data show weak and inconsistent links between inflation measures and ￰1￱ view shifts attention away from the old narrative that Bitcoin is mainly an inflation ￰2￱ Reading: XRP: The Catalyst For ‘Humanity’s Greatest Shift’ By 2030 —Analyst Inflation Link Weak Cipolaro argued that expectations for inflation are a slightly better signal than headline inflation readings, but still not a tight predictor of Bitcoin’s price. Instead, Bitcoin and gold both tend to gain when the US dollar ￰3￱ gold’s inverse relation with the dollar is long established, Bitcoin’s opposite movement to the dollar is newer but ￰4￱ And Bitcoin React To Dollar Moves Based on reports, gold has historically climbed as the dollar ￰5￱ is following that pattern, though its correlation is less steady than gold’s.

As Bitcoin becomes more connected with mainstream finance, NYDIG expects that its inverse relationship with the dollar will likely ￰6￱ makes sense to traders who price everything in dollars and seek alternatives when the greenback loses purchasing ￰7￱ Rates And Money Supply Cipolaro highlighted interest rates and money supply as the two major macro levers that move both gold and ￰8￱ interest rates and looser monetary policy have tended to support higher prices for these ￰9￱ simple terms: when borrowing costs drop and liquidity rises, Bitcoin often ￰10￱ note framed gold as more of a real-rate hedge, while Bitcoin is described as acting like a gauge of market liquidity — a subtle but important distinction for ￰11￱ Supply Drops, Selling Pressure Returns On-chain data show signs of renewed ￰12￱ say illiquid Bitcoin — coins held in long-dormant wallets — fell from 14.38 million earlier in October to 14.300 million on the 23rd of ￰13￱ Reading: ‘Money Will Pour In’ – CEO Predicts Bitcoin Will Explode To $180K That change means roughly 62,000 BTC, worth about $6.8 billion at recent prices, moved back into ￰14￱ the past, large inflows did exert price ￰15￱ January 2024, a substantial sum of coins came available that caused the price momentum to ￰16￱ to Glassnode data, there has been a consistent selloff from wallets holding from 0.1 to 100 BTC, and first-time buyer supply has contracted down to ~213,000 ￰17￱ overall assessment from a macro perspective and on-chain metrics is not ￰18￱ from new buyers appears to be lighter, momentum traders appear to have stepped aside, and more coins are now available to ￰19￱ combination can blunt rallies or deepen pullbacks until liquidity conditions improve or the dollar ￰20￱ image from Gemini, chart from TradingView