For those trading Bitcoin (BTC) at $78,278.51, the movements of the Dollar Index (DXY), which measures the U.S. dollar’s strength against other currencies, have not been as significant in nearly four years.
This inverse relationship is evidenced by a 30-day correlation coefficient between Bitcoin and the DXY standing at -0.90 according to TradingView, marking the most negative reading since September 2022. A value below zero indicates that when the dollar weakens, Bitcoin tends to strengthen, and vice versa.
However, this correlation can be influenced by Bitcoin’s continuous trading cycle, especially during weekends, which doesn’t align with the DXY’s weekday-only activity.
The coefficient of determination, or the square of the correlation, is 0.81, suggesting that about 81% of Bitcoin’s recent price movements are statistically linked to fluctuations in the index.
Despite reaching highs above $79,000 on Wednesday, Bitcoin’s rally has since stalled as the DXY rebounded from a low of 97.63 on April 17 to 98.75.
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The Dollar Index’s outlook appears bolstered by broader macroeconomic risks, including rising oil prices due to disruptions in the Strait of Hormuz and ongoing U.S.-Iran tensions over ceasefire negotiations.
“Macro factors are still resisting BTC’s rally. With five consecutive sessions of rising oil prices and continued constraints in Hormuz, inflation concerns persist, preventing a full unwind of risk premiums,” analysts at Marex noted in an email.
A positive aspect is the consistent inflows into U.S.-listed spot exchange-traded funds (ETFs), which help support prices. Nonetheless, industry leaders remain cautious.
Anthony Scaramucci, founder of SkyBridge Capital, suggested that Bitcoin might not experience a significant recovery until October or November. He noted that large Bitcoin holders and long-term investors have been selling into ETF-driven demand. Stay alert!
For further analysis on altcoins and derivatives today, see Crypto Markets Today. For an event list this week, refer to CoinDesk’s ‘Crypto Week Ahead.’
A chart illustrates the daily fluctuations in the ether-bitcoin (ETH/BTC) ratio using candlestick format since last July.
This week, the ratio dropped nearly 3% to 0.02965, its lowest since March 15, signaling two bearish trends: a break from the short-term ascending channel that supported recovery from early February lows and a move below the broader downtrend line established since August.
This breakdown suggests increased bearish momentum, hinting at possible further declines or extended consolidation in the ETH/BTC pair, indicating continued underperformance of Ether relative to Bitcoin.