The US dollar index saw its best daily performance in almost 9 months when BTC / USD fell after Elon Musk’s cryptic tweet.

Bitcoin price fell nearly 5% on the morning of June 4 as investors grappled with Elon Musk’s cryptic tweets about the cryptocurrency, leading many to believe that the Tesla CEO was his remaining 43,200 BTC company could sell.

Bitcoin’s downward movement, however, coincided with a massive surge in the U.S. Dollar Index (DXY), fueling speculation that more than one factor accelerated BTC’s plunge significantly in Friday’s early trading session.

Looking back, the US dollar index (which measures the strength of the greenback against major currencies) rose 0.18% to hit a three-week high of 90.627 on Musk’s tweet. Meanwhile, Bitcoin price fell 9.31% over the same period to an intraday low of $ 35,593.

The chart below illustrates Bitcoin’s immediate reaction to Musk’s tweet – a large red candle on the hourly chart, followed by continued price declines. In contrast, the dollar began a steady rise in traditional markets and eventually saw its biggest daily gain since September 2020.

Bitcoin reduction a rally in the US dollar index market also coincided after Musk’s tweet | Source: TradingView

Phased traders see Bitcoin as an asset against the dollar, largely because the leading cryptocurrency acts as a haven from fiat devaluation. The story gradually emerged mainly after the global market crash caused by the COVID-19 pandemic in March 2020.

This event prompted the Federal Reserve (Fed) to take unprecedented support measures, including near zero interest rates and unlimited bond purchase programs, to isolate the US economy from the aftermath of the pandemic.

Meanwhile, the U.S. government has launched three consecutive stimulus programs – $ 2.8 trillion in March 2020, $ 900 billion in December 2020, and $ 1.9 trillion in March 2021 – to help Americans through direct check payments.

US national debt according to the Months from April 2020 | Source: Statista

The expansion policy has increased the US public debt burden from $ 24.97 trillion in April 2020 to $ 28.174 trillion in April 2021. As a result, the US dollar’s strength against other major currencies has plummeted by more than 12.5% ​​since March 2020. Meanwhile, Bitcoin’s performance also increased 855%.

This graph shows the development of an investment of 1000 USD in #Bitcoin and traditional investments like # Stocks, #Gold or #Dollar.

Bitcoin, despite the high volatility, has outperformed all of them over the past 10 years. pic.twitter.com/TIae6U7PTo

– Vince Prince (@ VincePrince244) June 2, 2021

“This diagram shows the development of a $ 1000 investment in Bitcoin and traditional investments such as stocks, gold, dollars.

REMOVEDespite the high volatility, Bitcoin has surpassed them all in the past 10 years. “

Yesterday’s early morning slump in the Bitcoin market confirms an immediate negative correlation with the US dollar for short periods of time.

However, on the weekly chart, the two assets continue to move in opposite directions, reminding us that Musk, at $ 1.3 billion in BTC in a $ 690 billion market, is unrelated to what it was in the past. More pressing macro concerns, including inflation.

BILLIONNegative correlation of Bitcoin and US dollar index since March 2020 | Source: TradingView

Elon Musk just Is a stage

Tesla continues to struggle to generate income from sales of electric vehicles, according to the company’s records for the first quarter. Of the $ 594 million they reported, less than $ 100 million came from actual business. The rest, on the other hand, is accounted for by selling profitable BTC holdings (~ 272 million) and regulatory loans.

In short, Musk’s Bitcoin game is similar to that of a retailer.

The billionaire businessman has so far seen cryptocurrencies as a tool to offset the underperformance of his company.

This is also evidenced by his move to stop accepting BTC as a payment method, followed by tweets possibly urging Tesla to sell all of its Bitcoin holdings and then post the disconnect meme. It is more interesting that on the same day the global media Reuters news Tesla car sales in China fell 50% due to quality issues.

But Musk’s influence on the Bitcoin market is waning with every anti-crypto tweet, proving that the magnitude of the impact on crypto is diminishing. For example, his controversy with Twitter influencers in mid-May saw the BTC / USD rate plummet from a high of $ 58,000 to just $ 30,000 – a drop of about 42%. But soon the pair made up almost 30% of their losses.

Meanwhile, Elon Musk’s latest candle only lost $ 3,500 in Bitcoin valuation, posting a loss of around 9% that day.

A Twitter user suppose i think:

“To blame Elon for the drop in prices this time around is to negate the fact that the breakout had no volume and failed to break the $ 39,500 resistance. Before he tweeted, the price fell after 3 attempts to break out.

As such, Bitcoin continues to trade bullishly over the long term, fueled by the same anti-dollar fundamentals that primarily attracted companies like Tesla. More bullish signals for crypto are expected from President Joe Biden’s $ 6 trillion government spending package, causing more print Discount against the US dollar.

The economist Daniel Lacalle has write:

“Biden’s massive debt program and the Fed’s money printing could really hurt the dollar’s reserve status.”

Currently, the cryptocurrency remains in technical limbo, awaiting a decisive step to step out of the $ 32,000 to $ 40,000 range.

At home at home

According to Cointelegraph

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