U.Today – Patterns have begun to emerge amid the current price volatility in the cryptocurrency market. There are signs of strong correlations between digital assets and traditional financial assets. In a post on X, Mike McGlone, senior commodities strategist at Bloomberg Intelligence, highlighted the correlations of some of these assets.
Strong positive correlation
McGlone noted that (BTC) and (DOGE) have a strong positive correlation of 0.68. This suggests that Bitcoin's price movement closely determines those of DOGE. In the broader market dynamics, both currencies rise and fall together due to correlation.
McGlone's analysis appears to be developing as Bitcoin and Dogecoin are experiencing a downward price movement at the time of writing. Interestingly, the price drop began hours apart, with Bitcoin declining first, only for DOGE to follow the same trajectory.
Data from CoinMarketCap shows that BTC is trading at $92,873.61, a decrease of 3.04% in the last 24 hours. DOGE has recorded a slightly larger drop of 8.16% to $0.3214. Regardless of the percentage difference, both are seeing a rapid decline compared to how they started in January.
However, on rare occasions, DOGE has broken correlation with Bitcoin, U.Today reports.
Comparative analysis with traditional assets
McGlone further emphasized this correlation by comparing BTC to traditional assets like the S&P 500. This positive correlation of 0.32 with BTC indicates a modest relationship with the stock market. When the S&P 500 rises or falls, Bitcoin tends to follow the same direction, but not as strongly as the BTC-DOGE dynamic.
According to McGlone, gold and the US dollar index are at 0.15 and -0.14, respectively. This emphasizes the weak relationship between Bitcoin and gold. The negative correlation with implies that BTC moves in the opposite direction to the value of the dollar.
When Bitcoin strengthens, the dollar weakens and vice versa. Overall, the strongest correlation is currently occurring in the broader cryptocurrency market, where BTC and DOGE are on a downward trajectory.
This article was originally published on U.Today.
