CryptoQuant has released an analysis highlighting the changed connection of Bitcoin with traditional macroeconomic indicators in the current market cycle.
Bitcoin and Macroeconomics
CryptoQuant analysts claim that macroeconomics has become the dominant theme in today's cryptocurrency market. Investors are closely monitoring macroeconomic indicators like the US Dollar Index (DXY) and US Treasury yields. These indicators provide important signals about global liquidity and institutional investor sentiment.
Correlation with Bonds
The analysis features a chart comparing Bitcoin with DXY and 5-, 10-, and 30-year US bond yields. Historically, when DXY and bond yields rise, capital flows out of riskier assets, often leading to corrections for assets like Bitcoin. Bear cycles in the crypto market often coincide with such bullish periods. Conversely, when DXY and bond yields weaken, risk appetite increases, usually coinciding with periods of easing monetary policy or rising expectations of a Fed rate cut.
Changes in Perception of Bitcoin
However, what is striking in the current cycle is that Bitcoin is diverging from this traditional macro model. Despite bond yields reaching all-time highs, the BTC price continues to rise. Bitcoin seems to be gaining momentum, especially when DXY starts to fall. This 'abnormal' divergence may indicate that Bitcoin’s role in macroeconomic dynamics is reshaping, as according to CryptoQuant analysts, Bitcoin is now perceived more as a store of value.
CryptoQuant's study raises important questions about the future of Bitcoin in light of macroeconomic changes, indicating a potential transformation in its market perception.
