Checks for $1,200 to Americans will definitely be part of any deal, says Steven Mnuchin, while DXY’s weakness opens opportunities for gains with Bitcoin.
Bitcoin rises against the dollar after Mnuchin pledges second market stimulus check
The Bitcoin (BTC) could see a price increase this week as the US Dollar Index (DXY) weakens and an analyst tells US voters to buy.
Bitcoin is considered the best investment of the 3rd quarter after gaining 21.33%.
Data showed that DXY fell by the fourth day on 1 October, while negotiations on a new agreement to stimulate the coronavirus continued in Washington.
Vays: „Buy Bitcoin,“ no matter who wins the US elections
DXY and BTC/USD have shown a strong inverse correlation in recent months. The recent gains in DXY have not translated into intense selling pressure for Bitcoin, but further losses may still drive the BTC bullish market in the long run.
The turnaround in DXY’s fortunes comes when the US Senate tries to negotiate a new aid deal for the coronavirus, which could cost $2.5 trillion.
Speaking to FOX Business on Wednesday, Treasury Secretary Steven Mnuchin confirmed that negotiations were underway, but that any agreement would include a new round of $1,200 stimulus checks for eligible US citizens.
„The good news is that we have reached an agreement that, if there is an agreement, there will be direct payments in the package similar to last time,“ he said.
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Mnuchin spoke one day after a heated debate between President Donald Trump and Presidential candidate Joe Biden.
With tensions rising, popular broker Tone Vays sought to get viewers‘ attention online arguing that no matter who takes control of the White House, the printing of money, like that which finances stimulus packages, would continue to damage the dollar.
„No matter who wins, they will continue printing, so BUY BITCOIN,“ Vays wrote in a live chat as the debate went live.
U.S. dollar currency index 3-month chart
3-month graph of the US dollar currency index. Source: TradingView
DXY-Bitcoin correlation for decline
Meanwhile, the setback of the last few days has begun to alter the correlation between DXY and Bitcoin, reveals the data.
Compiled by the Digital Assets Data analysis feature, a comparison of Bitcoin’s 90-day return correlations with DXY, gold, VIX and the S&P 500 shows the DXY hitting bottom at the end of September.
Bitcoin 90-day returns correlations comparison
Comparison of 90 days of Bitcoin returns. Source: Digital Assets Data
In contrast, the BTC/USD remains highly correlated with gold and the S&P 500 in October, as the price of Bitcoin recorded its second best quarter in history, closing the month above US$10,600.
As reported by the Cointelegraph, however, not everyone believes the situation will last. Soon, Bitcoin should break completely with traditional markets.