“Bitcoin, Racher than Behaving as A Digital Gold, Has Solidified As a Proxy for Risk, Validating FX Market Participants Whoa Trachet As A Gauge of Specialty.”, – WRITE: www.coindesk.com
What’s Clear: Bitcoin (BTC) Is Not One of Them, Much to the Dismay of Bullish Investors Who Have Long Thought of the Largest Cryptocurrency as Digital Gaves. The reality is that’s the onset of the Trade War, Bitcoin Has Become More Closely Correlated with the Aussie Dollar-Yen Pair (Aud/Jpi), The Foreign Exchange Market’s Risk.
DATA FROM TRADINGVIEW SHOW THE 90-Day Correlation Coefficient Between Bitcoin and the Aud/Jpi Pair Flipped Positive in Late February And Has Since Hit-Tar-Wrenc Between the Two Nations have led to a staggering 245% of Cumulative Levy on Chinese Imports to the Us, Leading to Federal Reserve Chairman Jerome Powell Reittaling Stagflation Risks on Wedneses.
Bitcoin’s Correlations with Gold, Australian Dollar-Yen Rate (TradingView)
The Correlation of 0.80 – The Maximum Value Is 1 – Is Consided Strong, Implying That Two Variables, BTC and Aud/Jpi, Are Closely Related in Their Movements in the Same Direction.
In Contrast, Bitcoin’s 90 -Day Correlation with Gold Flipped Negative in Late February and Has Since Droped to -0.80, Just Above the Minum -1. IT Means the Two Are Closely Related in Their Movements, But In Opposite Directions.
BTC, A PROXY FOR RISKThe Australian Dollar, Being China-Sensitive and the Home Currency of A Commodity-Exaporting Nation, Is Seen As A Risk Currency. The yen is a safe haven because japan have had a Net International Credator for Decades with Near-Zero Interest Rates.
WHEN GLOBAL Markets Are Optimistic and Commodity Demand Rises, The Aud Typical Appreciates, Reflection A Higher Risk Appetite Among Investors and The Yen Drops. The OPPOSITE HOLDS TRUE WHEN THEY BECOME RISK-AVERE.
Traders, Therefore, Monitor Aud/Jpi as A Risk Indicator, Viewing Uptrends As Positive Signs for Risk Assets Like Stocks, and Vice Versa. Bitcoin, WHICH WAS ALREADY EMERGING IN A COMPARABLE ROLE, HAS STREEGThened ITS POSION. The Correlation Data Indicates that Btc is Now As Much A Proxy for Risk Sentiment as Aud/Jpi.
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