09-04-2022, 03:02 AM
The Relationship Between Bitcoin and US Dollar Index
<table> <tr><td> <a href="https://www.reddit.com/r/CryptoCurrency/comments/x4tzvb/the_relationship_between_bitcoin_and_us_dollar/"> <img src="https://b.thumbs.redditmedia.com/-vs5bPym5AYSfjk0EPR4YlPUCKJe0prmULXTjDd7FTE.jpg" alt="The Relationship Between Bitcoin and US Dollar Index" title="The Relationship Between Bitcoin and US Dollar Index" /> </a> </td><td> <!-- SC_OFF --><div class="md"><p>Many of you probably know this, but for those who don't, historical data suggests that whenever US Dollar Index (DXY) goes up, BTC goes down and vice-versa.</p> <p>This became the inspiration for a recent undergrad project that we did. We were tasked to make a model about anything and put it in an ACM-formatted paper so I decided to go with this, but it's been a month now and I don't think we'll be publishing it anytime soon since it's waaayyy too simple (and perhaps a bit flawed) imo. So instead, I will just share some of it with you all. <3</p> <h1>Methodology</h1> <p>The BTC dataset came from <a href="https://www.blockchain.com/charts/market-price">https://www.blockchain.com/charts/market-price</a> and the DXY dataset came from <a href="https://www.kaggle.com/datasets/balabaskar/us-dollar-index-data">https://www.kaggle.com/datasets/balabaskar/us-dollar-index-data</a>. Yes, I know. The DXY dataset is a bit outdated, but we had to make the paper <em>in a week</em> (actually we were given at least 2 weeks but we procrastinated for the most part) and we couldn't get a better one in time.</p> <p>Based on the BTC rainbow chart, we added a DXY price parameter to the model and fitted the model. I won't go into the details since it will probably bore you and I'm sure you're just here to see the results, so without further ado...</p> <h1>Results & Discussion</h1> <p>Here's the resulting fitted model: <sup>(these are all rounded to the nearest 0.01</sup>)</p> <p><code>BTC Price = 10 ^ (-17.71 + (-0.06)(DXY Price) + (3.30)(ln(Number of days since 3 January 2009)))</code></p> <p>This model got <em>RMSE = 0.25</em>, <em>R-Squared = 0.96</em>, and <em>Adjusted R-Squared = 0.96</em></p> <p>Here are the graphs in comparison to real data:</p> <p>​</p> <p>​</p> <p><a href="https://preview.redd.it/dxyl3nztcql91.png?width=798&format=png&auto=webp&s=3bd65e9237ac02739c9360cbf711b2d9dc4f4a66">Logarithmic Chart (yes, I know I could've scaled this better)</a></p> <p><a href="https://preview.redd.it/gvuwvrivcql91.png?width=798&format=png&auto=webp&s=f447c1690b527ca23f819a27b76c5417eb3836da">Linear Chart</a></p> <p>You can kinda see that the model managed to capture many upward/downward movements (except 2019, idk what happened there) despite not getting the actual price.</p> <h1>Conclusion</h1> <p>Honestly, idk if this could help anyone since DXY isn't really <em>that</em> predictable either. But hey, it looks cool and we even got a good grade for it.</p> <p>​</p> <p>Inner Thoughts</p> <p><sup>Should I really be posting this here? I'm kinda worried about what would happen if all of a sudden they want to publish this sht. lol</sup></p> <p>​</p> <p>EDIT: I forgot to say, we did split the dataset for fitting and testing. The images there are the results of testing.</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/CEDoromal"> /u/CEDoromal </a> <br/> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/x4tzvb/the_relationship_between_bitcoin_and_us_dollar/">[link]</a></span> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/x4tzvb/the_relationship_between_bitcoin_and_us_dollar/">[comments]</a></span> </td></tr></table>
<table> <tr><td> <a href="https://www.reddit.com/r/CryptoCurrency/comments/x4tzvb/the_relationship_between_bitcoin_and_us_dollar/"> <img src="https://b.thumbs.redditmedia.com/-vs5bPym5AYSfjk0EPR4YlPUCKJe0prmULXTjDd7FTE.jpg" alt="The Relationship Between Bitcoin and US Dollar Index" title="The Relationship Between Bitcoin and US Dollar Index" /> </a> </td><td> <!-- SC_OFF --><div class="md"><p>Many of you probably know this, but for those who don't, historical data suggests that whenever US Dollar Index (DXY) goes up, BTC goes down and vice-versa.</p> <p>This became the inspiration for a recent undergrad project that we did. We were tasked to make a model about anything and put it in an ACM-formatted paper so I decided to go with this, but it's been a month now and I don't think we'll be publishing it anytime soon since it's waaayyy too simple (and perhaps a bit flawed) imo. So instead, I will just share some of it with you all. <3</p> <h1>Methodology</h1> <p>The BTC dataset came from <a href="https://www.blockchain.com/charts/market-price">https://www.blockchain.com/charts/market-price</a> and the DXY dataset came from <a href="https://www.kaggle.com/datasets/balabaskar/us-dollar-index-data">https://www.kaggle.com/datasets/balabaskar/us-dollar-index-data</a>. Yes, I know. The DXY dataset is a bit outdated, but we had to make the paper <em>in a week</em> (actually we were given at least 2 weeks but we procrastinated for the most part) and we couldn't get a better one in time.</p> <p>Based on the BTC rainbow chart, we added a DXY price parameter to the model and fitted the model. I won't go into the details since it will probably bore you and I'm sure you're just here to see the results, so without further ado...</p> <h1>Results & Discussion</h1> <p>Here's the resulting fitted model: <sup>(these are all rounded to the nearest 0.01</sup>)</p> <p><code>BTC Price = 10 ^ (-17.71 + (-0.06)(DXY Price) + (3.30)(ln(Number of days since 3 January 2009)))</code></p> <p>This model got <em>RMSE = 0.25</em>, <em>R-Squared = 0.96</em>, and <em>Adjusted R-Squared = 0.96</em></p> <p>Here are the graphs in comparison to real data:</p> <p>​</p> <p>​</p> <p><a href="https://preview.redd.it/dxyl3nztcql91.png?width=798&format=png&auto=webp&s=3bd65e9237ac02739c9360cbf711b2d9dc4f4a66">Logarithmic Chart (yes, I know I could've scaled this better)</a></p> <p><a href="https://preview.redd.it/gvuwvrivcql91.png?width=798&format=png&auto=webp&s=f447c1690b527ca23f819a27b76c5417eb3836da">Linear Chart</a></p> <p>You can kinda see that the model managed to capture many upward/downward movements (except 2019, idk what happened there) despite not getting the actual price.</p> <h1>Conclusion</h1> <p>Honestly, idk if this could help anyone since DXY isn't really <em>that</em> predictable either. But hey, it looks cool and we even got a good grade for it.</p> <p>​</p> <p>Inner Thoughts</p> <p><sup>Should I really be posting this here? I'm kinda worried about what would happen if all of a sudden they want to publish this sht. lol</sup></p> <p>​</p> <p>EDIT: I forgot to say, we did split the dataset for fitting and testing. The images there are the results of testing.</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/CEDoromal"> /u/CEDoromal </a> <br/> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/x4tzvb/the_relationship_between_bitcoin_and_us_dollar/">[link]</a></span> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/x4tzvb/the_relationship_between_bitcoin_and_us_dollar/">[comments]</a></span> </td></tr></table>