CoinDesk
The U.S. Dollar Index has climbed about 2.6% since Sept. 9, reaching a two-month high of 101.69, while Bitcoin pulled back to $83,000-$84,000 from nearly $87,500. The moves fit the usual view that a stronger dollar pressures risk assets, but the relationship is not strong enough to explain most of BTC’s price action.
Why it matters
Over the past 90 trading days, Bitcoin and the DXY had a correlation of -0.41, their most negative reading since February 2023. The inverse relationship is real, but an R-squared of 0.17 means dollar moves account for only about 17% of the variation in Bitcoin’s daily returns.
Shorter-term readings are less reliable. The 30-day correlation is -0.45, but two sessions when BTC rose more than 5% as the dollar fell heavily influence that figure. Excluding those days, the reading drops to -0.19. Since January 2020, the 90-day correlation has averaged just -0.14 and has occasionally turned positive.
Market impact
A firmer dollar may be capping Bitcoin’s upside, but the data point to other forces driving most daily moves. Bitcoin also has little notable correlation with U.S. Treasury yields, supporting the case for BTC as a portfolio diversifier rather than a simple dollar hedge.
The DXY is above the Ichimoku cloud, though it has yet to break immediate resistance at 101.80. A move above that level could strengthen the dollar’s momentum. Whether Bitcoin maintains its relative independence as currency and rate conditions shift remains the key relationship to watch.
Frequently asked questions
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How much has the U.S. Dollar Index risen since Sept. 9?
The DXY has gained about 2.6% since Sept. 9 and reached a two-month high of 101.69.
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What does Bitcoin’s 90-day correlation with the dollar indicate?
The correlation of -0.41 indicates BTC and the DXY have tended to move in opposite directions over the past 90 trading days. The relationship remains modest.
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How much of Bitcoin’s daily return variation does the DXY explain?
An R-squared of 0.17 means DXY moves account for about 17% of the variation in Bitcoin’s daily returns.
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Why is the 30-day BTC-DXY correlation less reliable?
Two sessions when Bitcoin rose more than 5% as the dollar fell heavily influence the -0.45 reading. Excluding them, the correlation drops to -0.19.
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What DXY level is the next resistance to watch?
The immediate resistance is 101.80. The DXY is above the Ichimoku cloud but has not yet broken through that level.
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