U.Today – As prices continue to fluctuate in the cryptocurrency market, a pattern is beginning to emerge. There are signs of a strong correlation between digital assets and traditional financial assets. Mike McGlone, senior commodities strategist at Bloomberg Intelligence, highlighted some of the correlations between these assets in a post on X.
strong positive correlation
McGlone pointed out that (BTC) and (DOGE) have a strong positive correlation of 0.68. This suggests that Bitcoin price fluctuations closely determine DOGE price fluctuations. In broader market dynamics, both coins rise and fall at the same time due to correlation.
McGlone’s analysis appears to come as Bitcoin and Dogecoin are experiencing price declines as of this writing. Interestingly, the price declines started several hours apart, with Bitcoin dropping first, while only DOGE followed the same trajectory.
According to data from CoinMarketCap, BTC is trading at $92,873.61, down 3.04% in the past 24 hours. DOGE recorded a slightly higher rate of decline, down 8.16% to $0.3214. Regardless of the percentage difference, both are experiencing rapid declines compared to the start of January.
However, as reported by U.Today, on rare occasions DOGE breaks its correlation with Bitcoin.
Comparative analysis with conventional assets
McGlone further highlighted this correlation by comparing BTC to traditional assets such as the S&P 500. This positive correlation of 0.32 with BTC indicates a moderate 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 dynamics.
The gold and US dollar indexes are at 0.15 and -0.14, respectively, McGlone said. This highlights the weak relationship between Bitcoin and gold. A negative correlation with BTC means that BTC moves in the opposite direction to the dollar value.
When Bitcoin rises, the dollar falls, and vice versa. Overall, a stronger correlation is now emerging in the broader crypto market, with BTC and DOGE on a downward trajectory.
This article was originally published on U.Today
