The correlation between bitcoin's price and the Dollar Index has reached its most extreme level in nearly four years, with a 30-day correlation coefficient of -0.90. This indicates a strong inverse relationship, where a weaker dollar leads to bitcoin gains and vice versa.
The coefficient of determination suggests that approximately 81% of bitcoin's short-term price movements are statistically linked to the Dollar Index. However, bitcoin's recent rally has stalled, coinciding with a rebound in the Dollar Index. Broader macro risks, including elevated oil prices and geopolitical tensions, are expected to support the Dollar Index. Analysts warn that these factors may hinder bitcoin's continued rally, with some predicting a meaningful recovery only in October or November.
Meanwhile, the ether-bitcoin ratio has fallen to its lowest level since March 15, indicating bearish momentum and potential further downside for ether relative to bitcoin.