The correlation between bitcoin (BTC) and the Dollar Index (DXY) has reached a 30-day correlation coefficient of -0.90, the most negative reading since September 2022, according to TradingView. This suggests a strong inverse relationship, where a weaker dollar leads to bitcoin gains and vice versa.
However, it's essential to consider the influence of bitcoin's 24/7 trading structure on this reading. The coefficient of determination is 0.81, indicating that approximately 81% of bitcoin's short-term price movements are statistically associated with the Dollar Index. Bitcoin's recent rally has stalled after hitting highs above $79,000, coinciding with the DXY bouncing to 98.75 from its April 17 low of 97.63.
The Dollar Index's outlook appears supported by broader macro risks, including elevated oil prices and the ongoing U.S.-Iran standoff. Analysts at Marex note that macro factors are still leaning against bitcoin's continued rally, citing rising oil prices and the constrained Strait of Hormuz.
Despite sustained inflows into U.S.-listed spot exchange-traded funds (ETFs), industry leaders remain cautious. Anthony Scaramucci, founder of SkyBridge Capital, predicts that bitcoin may not see a meaningful recovery until October or November, aligning with the four-year reward halving cycle. The current price action is also influenced by whales and long-time holders selling into ETF-driven demand. Additionally, the ether-bitcoin (ETH/BTC) ratio has fallen nearly 3% to its lowest since March 15, breaking down from the short-term ascending channel and pushing below the broader downtrend line.
This breakdown reinforces bearish momentum and increases the likelihood of further downside or extended consolidation in the ETH/BTC pair, indicating continued underperformance of ether relative to bitcoin.