Analysis: Bitcoin Shows Relatively Independent Moves Ahead of Fed Decision, Weakening Correlation with Dollar Index and US Stocks

Bitcoin has shown relatively independent moves ahead of the Fed's rate decision, with its short-term correlation with the dollar index and US stocks notably declining. Alice Liu, Head of Research at CoinMarketCap, said Bitcoin's short-term correlation coefficient with the dollar index has dropped to 0.08, versus -0.54 over the past 30 days; its correlation coefficients with the S&P 500 and Nasdaq have fallen to 0.43 and 0.3, respectively, from 0.75 and 0.6 the previous day. Liu believes the market has recently shifted attention to the CLARITY Act, which failed a key procedural Senate vote on Tuesday, allowing regulatory developments to temporarily overshadow macro factors. As correlation weakens, the strategy of hedging long Bitcoin exposure by shorting S&P 500 futures has become less reliable. The market widely expects the Fed to raise rates by 25 basis points, a scenario largely priced in. This decision will test whether Bitcoin can re-establish its linkage with the dollar and US stocks; traders also need to watch post-meeting guidance and fluctuations in Treasury yields, as a notable rise in the latter could tighten financial conditions and drive risk-off flows in the crypto market.