Bitcoin Shows Reduced Correlation with the Dollar and Stocks Ahead of Fed Decision

Huo Xing Finance reports that on September 16, Bitcoin moved with relative independence ahead of the Federal Reserve’s interest rate decision, with its short-term correlation to the U.S. Dollar Index and U.S. equities significantly declining. Alice Liu, Research Director at CoinMarketCap, noted that Bitcoin’s short-term correlation coefficient with the U.S. Dollar Index dropped to 0.08, compared to -0.54 over the past 30 days; its correlation with the S&P 500 and Nasdaq indices fell to 0.43 and 0.30, respectively, from 0.75 and 0.60 the previous day. Liu believes that market attention has recently shifted toward the CLARITY Act, which failed to pass a key procedural vote in the Senate on Tuesday, temporarily overshadowing macroeconomic factors with regulatory developments. As correlations weaken, the strategy of hedging Bitcoin long positions by shorting S&P 500 futures has become less reliable. The market broadly expects a 25-basis-point rate hike, a scenario that has largely been priced in. This decision will test whether Bitcoin can reestablish its联动 with the dollar and U.S. equities; traders should also monitor post-meeting guidance and fluctuations in U.S. Treasury yields, as a significant rise in yields could tighten financial conditions and trigger risk-off capital flows into the crypto market.