Concerns about the impact of a stronger US dollar on BTC may not be as significant as previously thought, particularly in the long run.
According to Cointelegraph, the two assets are not highly correlated. On September 22, the US dollar index DXY reached a 10-month high in anticipation of the Fed tightening the monetary policy further.
This event formed a “golden cross” on the currency chart, which, according to technical analysis enthusiasts, signals a bullish trend.
However, the publication noted that the link between a strengthening dollar and weakening demand for Bitcoin may not be as strong as previously believed.
This is due to doubts about the Fed’s ability to control inflation without negative consequences for the economy.
At the same time, the weakening demand for Bitcoin in the midst of a stronger dollar may be offset by an increase in the money supply, which could prove positive for digital gold.
This is especially relevant as the government continues to raise the debt ceiling, which leads to a decrease in purchasing power and makes the nominal yield less significant.
This situation helps explain why scarce assets like Bitcoin can remain resilient even during economic downturns.
