Bitcoin and Dogecoin Correlation Spotlighted by Bloomberg Analyst

U.Today - Patterns have started to emerge amid ongoing price volatility on the cryptocurrency market. There are signs of strong correlations between digital assets and traditional financial assets. In a post on X, Mike McGlone, Senior Commodity Strategist for Bloomberg Intelligence, highlighted the correlations of some of these assets.

Strong positive correlationMcGlone noted that Bitcoin (BTC) and Dogecoin (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 coins rise and fall together due to the correlation.

McGlone’s analysis appears to be playing out as Bitcoin and Dogecoin are experiencing a downward price movement as of this writing. Interestingly, the price decline commenced hours apart, with Bitcoin descending first, only for DOGE to follow the same trajectory.

CoinMarketCap data shows BTC is exchanging hands at $92,873.61, a 3.04% decrease in the last 24 hours. DOGE has registered a slightly higher decline of 8.16% at $0.3214. Regardless of the percentage difference, both are experiencing a rapid decline compared to how they started in January.

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

Comparative analysis with traditional assetsMcGlone further emphasized this correlation by comparing BTC with 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 in the same direction, but not strongly like BTC-DOGE dynamics.

According to McGlone, gold and the U.S. Dollar Index have 0.15 and -0.14, respectively. This emphasizes the weak relationship between Bitcoin and gold. The negative correlation with the U.S. dollar index implies that BTC moves in the opposite direction of the dollar value.

When Bitcoin strengthens, the dollar weakens, and vice versa. Overall, the stronger correlation is currently playing out on the broader cryptocurrency market, where BTC and DOGE are on a downward trajectory.

Source: Investing.com