Bitcoin and Dogecoin Correlation Spotlighted by Bloomberg Analyst

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Clear patterns are arising in the unpredictable cryptocurrency market, suggesting that digital currencies may be increasingly linked with traditional financial markets. Mike McGlone, a Senior Commodity Strategist at Bloomberg Intelligence, recently pointed out these correlations among certain assets in a post on X.

Strong positive correlation

McGlone observed that Bitcoin (BTC) and Dogecoin (DOGE) share a significant positive relationship with a correlation coefficient of 0.68. This implies that the fluctuations in Bitcoin’s price tend to influence those of DOGE as well. In other words, both cryptocurrencies generally move up or down together within the broader market trends because of their strong connection.

2023’s Daily Correlations of Selected Markets:

– S&P 500: 0.32
– Gold: 0.15
– US Dollar Index: -0.14
– Dogecoin: 0.68

For a comprehensive look at the commodities sector, including gold, refer to the Bloomberg terminal at {BI COMD}. #economics #stocks #cryptocurrency

— Mike McGlone (@mikemcglone11) January 9, 2025

It seems that McGlone’s prediction is coming true, as both Bitcoin and Dogecoin have been showing a drop in their prices at the moment. Notably, Bitcoin started falling first, followed by Dogecoin, both moving in the same direction.

According to CoinMarketCap, Bitcoin is currently trading at $92,873.61, representing a 3.04% drop over the past day. Dogecoin, however, has experienced a steeper decrease of 8.16%, with its price standing at $0.3214. Despite the varying degrees of decline, both cryptocurrencies are showing significant drops compared to their January starting points.

However, on rare occasions, DOGE has broken the correlation with Bitcoin, as reported by U.Today.

Comparative analysis with traditional assets

McGlone underscored this connection by pointing out similarities between BTC and conventional assets such as the S&P 500. This positive correlation of 0.32 with BTC suggests a relatively weak association with the stock market. Essentially, when the S&P 500 experiences increases or decreases, Bitcoin generally moves in the same direction, although not to the same extent as observed in the relationship between BTC and DOGE.

McGlone’s findings suggest that gold and Bitcoin have a relatively weak connection, with gold showing a 0.15 association while Bitcoin displays a -0.14 correlation with the U.S. Dollar Index. In simpler terms, this means that changes in the value of the U.S. dollar tend to influence Bitcoin’s price in an opposite manner compared to gold.

In simpler terms, as the value of Bitcoin increases, the US dollar tends to decrease, and this pattern is also observed in other cryptocurrencies such as Dogecoin. At present, there seems to be a strong relationship between these digital currencies, with both BTC and DOGE showing a decline in value.

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2025-01-09 19:39