Macro-Economics and Crypto Correlation

In the early days, Crypto was uncorrelated—it moved on its own beat. Today, with institutional adoption, Bitcoin and Ethereum are heavily influenced by global Macro-Economics. To be a profitable trader, you must keep one eye on the charts and one eye on the Fed.

Key Macro Factors

1. Interest Rates (The Fed)

• High Rates: Borrowing is expensive. Money flows out of risky assets (Crypto/Tech Stocks) into safe yields (Bonds). Bearish for Crypto.
• Low Rates: Money is cheap. Investors chase returns. Bullish for Crypto.

2. DXY (US Dollar Index)

Crypto is priced in Dollars (BTC/USD). There is an inverse correlation.

• If DXY goes UP (Dollar gets stronger), BTC price usually goes DOWN.
• If DXY goes DOWN, BTC price usually goes UP.

3. S&P 500 Correlation

Bitcoin often moves in lockstep with the stock market, specifically the Nasdaq tech sector. A crash in stocks usually triggers a liquidity crisis in crypto.

Incorporating Macro into Your Bot

You can't program "Interest Rates" into a simple bot, but our AI Engine does it for you.

• During high-risk macro events (like an FOMC meeting), our AI lowers confidence scores, suggesting a defensive stance.
• We recommend reducing Leverage during these volatile weeks.

Don't fight the Fed. Trade with the tide, not against it.